Standard Life - 73p Cash Payment But .......

sabretoothtigger

Ironwolf has it. Shares wont determine value, they are returning money to holders so that means the shares are worth less but thats just normal.
Think of every dividend payout, the price goes down

philb120

Apologies if I am being a bit thick here but unfortunately I am based in Oman and only received an email about all this. No examples regarding B & C shares were included.

For tax purposes I am classed as non-resident. I have a holding of just under 2100 shares, no other shares held. I have been just reinvesting dividends via the DRIP scheme.

I assume that it is better for me to take the c option- my question is am I able to claim back the notional tax that has already been paid ? Can I claim back last years tax on the dividends as I was non- resident then as well? If so how do I go about it?

Many thanks in advance

bowlhead99

You will not have paid any tax on your dividends last year if you didn't do a tax return and deliberately send HMRC some money. So, seems unlikely you would have anything to claim back.

There is no deduction at source on UK dividends. There is just a notional tax credit that covers the 10% tax that basic rate taxpayers here owe. So only high rate taxpayers here will be paying any kind of taxes when they receive dividends. If you are not resident and not even paying any tax here, you don't have anything to 'claim back', right? If you didn't need a tax credit because you didn't have any tax to pay, nobody is going to pay you money in lieu of that tax credit.

The C shares will result in you getting a dividend. The B shares will result in you getting a capital return. If you are not a UK resident and the place(s) where you are resident (Oman?) doesnt have any income tax or capital gains tax, it presumably doesn't matter which option you choose.

philb120

Got it, thanks !

bigmondy

bowlhead99 wrote: »

If by 'the cusp of standard tax' you instead mean moving from 20% to 40% then you will probably be better off not increasing your annual income by not taking the 'C shares' dividend and simply taking the 'B shares' capital return instead. You have to fill out the form to select this.

Assuming you only have 2000 shares, you are only receiving ~£1500 cash. If you take the B route, you may need to pay taxes on the capital gain implied by that £1500 return of capital. Even if the current value of all your shares was 0.001% cost and 99.999% gain, that £1500 of gain is nowhere near your annual £11,000 allowance that HMRC gives you for capital gains every year. So there would be nothing to declare and no tax to pay. You receive 73p per share free and clear to do what you like with.

Sorry bowlhead - you have been great - I am a higher rate tax payer and I dont think I have used any CGT entitlement apart from the dividend i will get from SL - they are the only shares I have. I have about £4k in a Building Society account but I think I pay tax on the piddling amount of interest at source.

I am interested in holding the folding with the b option - I should be ok according to your last suggestion?

babyj3

Chris75 wrote: »

OK a very simplified explanation. I know a lot of people got Standard Life shares free just because they were policy holders and are not necessarily "investors". I am guessing that this is how you got your shares and that you don't normally buy & sell equities/shares.


Changing the Number of Shares
A share has a value printed on it but that doesn't really mean anything as it is not what the market will actually pay for it - which is why shares go up & down in value.


A company could have say 100 shares in issue that were valued by the market at £1 each - total value £100. If the company decided that it wanted 200 shares in issue it could do so by giving an extra share to every shareholder for every share that they held. The market would however still see the same company and say that as the company is worth £100 and there are 200 shares each share is worth 50p. 200 x 50p = £100. The company now has the 200 shares that it wanted and the shareholder is neither better nor worse off. Exactly the same argument applies if they reduce the number of shares. Less shares = more value per share.


Redistribution
If a company sells something (in this case a Canadian Company) it finds itself with a lot of cash and has to decide what to do with it. It can use the money to earn more profit for its shareholders or it can give the money back to the shareholders. In this case Standard Life has decided that it cannot use the money that it has received and wants to give it back.
If the company couldn't think of anything good to do with the money then you are better off having the choice of doing something else with it than letting Standard Life sit on the money but not generate any (or much) profit from it. You will be better of because you have the cash out and Standard Life generates the same (or nearly the same) profit but using less of your money - think of it as a higher rate of interest.


Does that help?

Yes I understand perfectly thank you but as I see it I will not be better off in fact I be will worse off because if I want to keep the same number of shares I will have to use the cash SL send to me and pay a buyers fee to buy back and reach my original holding . If I don't and keep the reduced holding I will be neither better off or worse off , I will be in the same financial position but having money return to me as cash rather than holding the shares . I wanted it left in the shares but that option is not on the table
The profit of the company is not the issue here for me at the moment as that is a different issue to be addressed separately to my mind
My position is that if SL had mentioned the consolidation at the same time as telling me they were returning capital to shareholders if I voted for the Canadian sale to go ahead in their letter dated September 2014 I would have known what they were planning but they did not. They only mentioned the capital return which I feel was misleading as I thought I was voting to receive a special dividend if the sale went ahead and I know other shareholders thought that too in fact even some newspapers reported a windfall for shareholders and some are still referring to it as that.
It is the fact that consolidation has only recently been mentioned and not as a separate voting option. I must vote for both or neither and find this unfair
Iam now hoping they offer me the chance at some point soon to sell all of my holding for free as they have done in the past as I have lost faith in the company and feel conned especially when I see the huge bonuses they have just voted in for themselves. So even if the share price goes up I still feel conned by this whole experience and it leaves a very bad taste in my mouth.
I always suspected that Big bonuses/shovelling money into their already big pensions might be an incentive here
As I am not a sophisticated investor and I can only hope that the big fund managers who are voting for this know more than I do
Luckily I am in a position that the money involved is not a great deal to me.
It is the principle but there again where money is involved I have found that principles and decency are the last things on people's minds
Someone asked about my faith in human nature and it brought to mind Sir Fred the shred Goodwin, Bradford and bingley, Northern Rock,Sir Stephen Green and HSBC scandal and then of course some of our fine upstanding MP and their overblown and fiddled expenses
What do they all have in common - money and greed
What a sad world and a sad state of affairs
I wish all of you who are happy with this situation well but I am getting out sooner rather than later
Thanks to anyone who offered advice and have a good weekend what's left of it

zolablue25

I appreciate this is very slightly off topic but can someone please confirm that the B shares are issued at a rate of one per Ordinary Standard Life share held? i.e if I have 500 SL shares I would be issued 500 B shares (before them being immediately bought back).

The reason I ask is that I would like to go for the B option as I don't have any other capital gains liabilities, but the website asks how many shares I would like to take as B option.

Thanks in advance for any help

Thrugelmir

babyj3 wrote: »

Yes I understand perfectly thank you but as I see it I will not be better off in fact I be will worse off because if I want to keep the same number of shares I will have to use the cash SL send to me and pay a buyers fee to buy back and reach my original holding . If I don't and keep the reduced holding I will be neither better off or worse off , I will be in the same financial position but having money return to me as cash rather than holding the shares . I wanted it left in the shares but that option is not on the table
The profit of the company is not the issue here for me at the moment as that is a different issue to be addressed separately to my mind
My position is that if SL had mentioned the consolidation at the same time as telling me they were returning capital to shareholders if I voted for the Canadian sale to go ahead in their letter dated September 2014 I would have known what they were planning but they did not. They only mentioned the capital return which I feel was misleading as I thought I was voting to receive a special dividend if the sale went ahead and I know other shareholders thought that too in fact even some newspapers reported a windfall for shareholders and some are still referring to it as that.
It is the fact that consolidation has only recently been mentioned and not as a separate voting option. I must vote for both or neither and find this unfair
Iam now hoping they offer me the chance at some point soon to sell all of my holding for free as they have done in the past as I have lost faith in the company and feel conned especially when I see the huge bonuses they have just voted in for themselves. So even if the share price goes up I still feel conned by this whole experience and it leaves a very bad taste in my mouth.
I always suspected that Big bonuses/shovelling money into their already big pensions might be an incentive here
As I am not a sophisticated investor and I can only hope that the big fund managers who are voting for this know more than I do
Luckily I am in a position that the money involved is not a great deal to me.
It is the principle but there again where money is involved I have found that principles and decency are the last things on people's minds
Someone asked about my faith in human nature and it brought to mind Sir Fred the shred Goodwin, Bradford and bingley, Northern Rock,Sir Stephen Green and HSBC scandal and then of course some of our fine upstanding MP and their overblown and fiddled expenses
What do they all have in common - money and greed
What a sad world and a sad state of affairs
I wish all of you who are happy with this situation well but I am getting out sooner rather than later
Thanks to anyone who offered advice and have a good weekend what's left of it

I'm surprised that you invested in shares in the first place. Enron, Maxwell, Polly Peck, Barings, BCCI the list goes on. The world is the same as it ever was.

gt94sss2

babyj3 wrote: »

My position is that if SL had mentioned the consolidation at the same time as telling me they were returning capital to shareholders if I voted for the Canadian sale to go ahead in their letter dated September 2014 I would have known what they were planning but they did not.

Share consolidations or splits are very common when a company undergoes some form of change.

Standard Life did mention both the return of Capital and the share consolidation in September 2014 - their letter on page 5 here states:

Following completion of the Disposal, Standard Life expects to return £1.75bn of capital (equivalent to 73p per share) to Shareholders by way of a B/C share scheme (the “Return of Capital”). Following the Return of Capital, Standard Life intends to carry out a share consolidation.

And its referred to several times afterwards in that 10 page letter - as well as being clear from this Q&A document

Regards
Sunil

bowlhead99

babyj3 wrote: »

My position is that if SL had mentioned the consolidation at the same time as telling me they were returning capital to shareholders if I voted for the Canadian sale to go ahead in their letter dated September 2014 I would have known what they were planning but they did not.

The share consolidation does not change your value. It merely changes the number of shares you hold and not your percentage ownership of business. The number of shares for a given percentage ownership is a completely arbitrary concept. They could increase the number of shares to a trillion or reduce them to a million and it would not change your ownership of the company or your rights to share any future profits that it makes. This has been explained several times.

You are not complaining about the consolidation. You are complaining about the capital return. You did not want to get the capital back in your hands, correct?. That is a complaint about the capital being returned and not a complaint about the consolidation, which is only being done as a consequence of capital return to help people compare the performance metrics more easily.

However, complaining about getting cash back in your hands is a misguided complaint because there is no point having money sitting around in a company which is not actively employed in improving the business and could more sensibly be returned to the company's owners, such as you.

They only mentioned the capital return which I feel was misleading

Yes, they did say there would be a capital return, which nearly everyone wanted. And there is going to be one. Your problem is that you don't know what a capital return is, because you don't understand investments in companies. At this point, you should try to learn about investments in companies, or sell them, as there is no point having the risk and responsibility of holding shares in individual companies or voting on corporate events that you don't comprehend.

as I thought I was voting to receive a special dividend if the sale went ahead

If you would like a special one off dividend, simply fill out your form to receive C shares, or don't bother to fill out the form at all, and you'll receive a dividend.

However, just as with any 'interim', 'final' or 'special' dividend from any company in the history of time and space, if the company pays the cash out to you as a dividend, it will not have the money in its bank account, so will be less valuable than if it had not paid the dividend out. It makes sense for companies to pay dividends out if it can't use the money more effectively than its shareholders can use the money themselves.

and I know other shareholders thought that too in fact even some newspapers reported a windfall for shareholders and some are still referring to it as that.

There is a windfall. The wind is blowing the apples off the tree into your lap. Your complaint seems to be that they have not also remained on the tree. That would be hard to achieve.

It is the fact that consolidation has only recently been mentioned and not as a separate voting option. I must vote for both or neither

You've read and understand the voting forms? You can vote against the consolidation and restructure if you want. It would be best to understand it before you do. We've done our best to help.

and find this unfair. I am now hoping they offer me the chance at some point soon to sell all of my holding for free as they have done in the past as I have lost faith in the company and feel conned especially when I see the huge bonuses they have just voted in for themselves. So even if the share price goes up I still feel conned by this whole experience and it leaves a very bad taste in my mouth.

You should probably sell up, or increase your knowledge to avoid getting"conned" again.

I always suspected that Big bonuses/shovelling money into their already big pensions might be an incentive here

. Absolutely, allowing executives to earn money and bonuses is a common way of incentivising management to deliver shareholder returns.

It is the principle but there again where money is involved I have found that principles and decency are the last things on people's minds
Someone asked about my faith in human nature and it brought to mind Sir Fred the shred Goodwin, Bradford and bingley, Northern Rock,Sir Stephen Green and HSBC scandal and then of course some of our fine upstanding MPs and their overblown and fiddled expenses

While none of those have anything to do with Standard Life selling a Canadian subsidiary and proposing to return the resulting capital to investors, or your misunderstanding how equity investments work and the implications of that... your use of phrases such as "Fred the shred", or using B&B liquidation or MP expenses as analogous to this situation implies you're relying on tabloids for your world view, which may discredit your complaint and lead to you being taken less seriously

I wish all of you who are happy with this situation well but I am getting out sooner rather than later
Thanks to anyone who offered advice and have a good weekend what's left of it

Hope your future investments are more successful. I'd advise a wide spread so that if anything else happens that you don't understand resulting in you running irrationally for the exit, you'll still have a core of simple investments giving you the growth and income you want.