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Work share scheme question
zaffi
Posts: 274 Forumite
Hi,
Cards on the table, I don't really know much about shares. But when the opportunity to join my work share scheme came up I grabbed it, and it's been doing quite well.
Just had a letter saying the parent company are restructuring the share scheme and by my calculations i'll lose about £320 in shares.
To sweeten this pill they are offering a huge dividend which would equate to about £500 which i could take as cash effectively tax free (i think) or continue as i currently do, reinvest.
So my question is, why are they doing this? If everyone takes the cash they have lowered the total shares circulating but at a massive upfront cost and if everyone reinvests there are more total shares. Or am I being an idiot? (feel free to say so)
Cards on the table, I don't really know much about shares. But when the opportunity to join my work share scheme came up I grabbed it, and it's been doing quite well.
Just had a letter saying the parent company are restructuring the share scheme and by my calculations i'll lose about £320 in shares.
To sweeten this pill they are offering a huge dividend which would equate to about £500 which i could take as cash effectively tax free (i think) or continue as i currently do, reinvest.
So my question is, why are they doing this? If everyone takes the cash they have lowered the total shares circulating but at a massive upfront cost and if everyone reinvests there are more total shares. Or am I being an idiot? (feel free to say so)
Everyone has a plan until they get punched in the face - Mike Tyson
0
Comments
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you will probably pay tax on your dividend0
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you will probably pay tax on your dividend
this is taken directly from the letter
If you are a basic rate tax payer and receipt of the dividend income does not put you into a higher
income tax band, the tax credit will satisfy your tax liability and there will be no income tax to pay.
Everyone has a plan until they get punched in the face - Mike Tyson0
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