hargreaves lansdown dividend policy

ajbell

I have a Hargreaves lansdown stocks and shares isa.
I have bought and sold a few shares within it recently and earned dividends on 3 shares which are payable in july. However I have since sold those shares. Will the dividends still be paid into my stocks and shares account?. I have chosen not to reinvest.

bowlhead99

It is not for Hargreaves Lansdown to set a policy on whether you're entitled to receive the dividends you earn by holding a company's shares. You hold the shares through one of their nominee companies but you are the beneficial owner of the shares and entitled to dividends just like someone who held directly.

There are a few dates you hear about from the company. Here's an example of one of mine:

On 26 Feb 2013:
The Board declared the payment of an interim dividend of RMB0.03 and a special dividend of RMB0.02 per share for the six months ended 31 December 2012.

The interim and special dividend will be paid in sterling or HK Dollars on or before 12 April 2013, to shareholders on the register at the close of business on the record date of 15 March 2013, with an ex-dividend date of 13 March 2013

.

In that example:
- I didn't need to hold the shares on 31 December. That's just the period during which the company made the profits from which it will pay the dividend.
- I didn't need to hold the shares on 26 Feb. That's just when they announced they would be making payments.
- I didn't need to hold the shares on 12 April. That's just the latest date by which they've promised to move the money.

I actually just needed to be on the share register (via my broker, or in your case HL) at end of day 15 March. In practical terms, as it takes 3 days to settle a shares transaction, I could have sold the shares through my account on 13 March. I wouldn't have been off the register until 16 March. So anyone buying from me on 13 March is buying 'ex div' because they won't be on the register until 16 March, and at close of business 15 March I'm still the person on the register and will be sent the dividends. Although the company might not pay out until April.

If you didn't sell the shares until they went ex-div, you'll get the cash, even if you don't currently hold them.

Shaolin_Monkey

The simple answer is if you held them on the day before they went ex-dividend and didn't sell them till after it went ex-dividend, then yes your account will be credited with the dividends.

The more complicated answer is that you have to hold them on the "record" date as this is when the shareholder records are updated. The record date is two days after the ex-dividend date. Because of the T+3 settlement period, if you want to qualify for the dividend you have to buy the shares at least 3 days before the record date (in other words, the day before the ex-dividend date). This link perhaps explains it better than I can - http://www.iii.co.uk/tools-research/knowledge-centre/dividend-dates-explained

ajbell

Sorry, I am aware of record and ex dividend dates. What I was asking is
whether the money will go to the account that I bought and sold them in even though the shares are no longer there.

grey_gym_sock

with HL, you have 3 options for dividends: reinvest, pay out (not an option for SIPPs), or just leave it in the account. you can have different settings for each account (ISA, fund & share, SIPP). so it depends how you've set it up.

Linton

To answer what I think was your basic question - the fact that you have subsequently sold the shares does not affect what happens to the dividends you are due. So if they would have gone into your account if you had kept the shares they would still go into your account.

ajbell

Thanks for all the replies. Linton, that was what I meant.