Vodafone windfall

planteria

if the Vodafone share price drops, Thrugelmir, the dividend could look very nice indeed.

pcyam

I've called Computershare and they don't know the answer

Basically, have decided that will probably sell the Verizon shares immediately rather than have shares.

Trying to find out if the lump sum and the sell of Verizon shares will be taxed at source if taken as Capital/Income. Then can decide which option to take.

Many Thanks

steady__eddie

I received my info this week from Barclays and am currently suffering from information overload. I would be grateful if some of you helpful people out there could assist me (yet again).
Ideally, I would have liked to have retained the Verizon shares after the dust has settled BUT in the words of Barclays, "Due to operational restrictions, we are unable to hold this particular CDI in your ISA account". They then go on to say that I can transfer them f.o.c. to another broker. Any recommendations for one ? I understand that the first Verizon dividend payable is in May and will be in $ so I would probably sell them just before they went ex div.
Would someone confirm please that because my shares are held in an ISA, there will be no Income or C.G.T liability on my behalf and in this case the decision whether to take the "return of value" in the form of capital or income is purely academic ? Given that this assumption is correct, I have 34000 vod shares and rather to much loose change in my ISA account at the moment. I was thinking about buying a few more extremely quickly in order to qualify for a larger "return of value". Any thoughts ?
I thank you in advance for your assistance.

bowlhead99

steady__eddie wrote: »

Ideally, I would have liked to have retained the Verizon shares after the dust has settled BUT in the words of Barclays, "Due to operational restrictions, we are unable to hold this particular CDI in your ISA account". They then go on to say that I can transfer them f.o.c. to another broker. Any recommendations for one ?

TD Direct are a pretty good broker, covering a very wide range of foreign markets, smartphone app trading, a funds platform and most if not all the features you might want for holding shares. An ISA account there has no annual admin fee (on the amount you're talking about i.e. £5k+) and the dealing fees are no worse than Barclays.

Alternatively X-O are an OK execution only broker with an ISA product and lower dealing fees (£6 a trade). It is a no frills service and an example of one downside with them is that they don't allow you to deal in foreign shares - however the Verizon CDIs are not the actual 'foreign' US-listed Verizon shares, they are UK Crest depositary interests, quoted on a UK market, and so they would hopefully let you hold them.

The challenge will be getting your VOD shares transferred over to either of them or someone else before the deadline record date in a couple of weeks. S&S transfers in specie typically take longer than cash ISAs.

I understand that the first Verizon dividend payable is in May and will be in $ so I would probably sell them just before they went ex div.
Would someone confirm please that because my shares are held in an ISA, there will be no Income or C.G.T liability on my behalf and in this case the decision whether to take the "return of value" in the form of capital or income is purely academic ?

In an ISA you don't pay UK income tax or CGT. So you are right it makes no difference to the decision on what type of election to make i.e. income or capital.

However, in terms of the later decision whether to hold onto the VZ shares for their May dividend or sell up just before that ex-div date for higher capital and no income:

Generally speaking, UK residents receiving foreign dividends may suffer tax withheld at source on them. So, not needing to declare shares in an ISA to the UK taxman is a good thing, but if the full amount of the dividend payment doesn't make it to your UK broker's account (ISA-wrapped or not) you would not get the full value.

I haven't held US shares in an ISA for a while and don't hold VOD any more so haven't looked into it, but it would seem inefficient to wait for the VZ div in May and then only get 85% of the amount after US tax being withheld at source. Whether holding VZ via a CDI in the UK (rather than directly on the NYSE) avoids this withholding I don't know, but it should be trivial to find out.

Given that this assumption is correct, I have 34000 vod shares and rather to much loose change in my ISA account at the moment. I was thinking about buying a few more extremely quickly in order to qualify for a larger "return of value". Any thoughts ?

My thought would be, it seems ridiculous to spend dealing fees and stamp duty to buy say £10k of shares as a new holding, and then instantly get say £5k returned to you as dividends or VZ CDIs and have your new £10k VOD holding drop in value by that £5k. There is no 'free money' to be made on the Record Date because everyone knows exactly how much return of value will be paid out at that time and it has already been taken into account in pricing VOD shares today.