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

bowlhead99

If the holder of the shares is tax exempt, like they own the shares in an ISA or pension plan, then they really don't care whether they receive dividends or capital gains because none of it is taxable.

IanSt

Thanks for that,

I thought that Mr Brown had made everyone pay at least the 10% tax on dividends (whether in ISA or not), which was why I thought the capital way was the route to go.

However glad that we don't have to do anything - the price of stamps are extortionate nowadays

bigmondy

Anyone looked at the closing price today.

£4.42 aaaaaaaaaaaargh. B Option definitely looks best surely?

bowlhead99 - have you a crystal ball? I seem to recall you suggesting a 5% swing over a short term could be possible.

bowlhead99

IanSt wrote: »

I thought that Mr Brown had made everyone pay at least the 10% tax on dividends (whether in ISA or not), which was why I thought the capital way was the route to go.

If you see some of the other posts: nobody ever 'pays' a 10% tax on dividends.

A basic taxpayer gets his 73p and doesn't pay any further tax, the 10% is just a notional credit due to a quirk of the system. He keeps 73p. A high rate taxpayer pays tax, and at more than 10%. He keeps 54.75p. A nil rate taxpayer (earning less than annual allowance) pays nothing and keeps 73p, and a pension or ISA investor also pays nothing and keeps 73p.

So, 10% dividend tax is a bit of a myth really because there is nobody in the country who actually pays any tax at 10% on a 73p dividend that a company declares. Simple

bowlhead99

bigmondy wrote: »

Anyone looked at the closing price today.

£4.42 aaaaaaaaaaaargh. B Option definitely looks best surely?

bowlhead99 - have you a crystal ball? I seem to recall you suggesting a 5% swing over a short term could be possible.

If I remember right, and am not confusing you with someone else, you said you were a higher rate taxpayer? So assuming you are not going to make any last minute pension contributions in the next month to get rid of your higher rate earnings, you will pay income tax on dividends received just like any other higher rate taxpayer and that will cost you 25% of the 73p.

Whereas presumably you have plenty of capital gains tax allowance left for the year, so you don't mind having some capital returned to you because there won't be any tax to pay on it even if 99.99% of the 73p capital proceeds were a 'gain'.

Therefore it makes sense for you to send a form in and ask for the B shares rather than be left with the default option of C shares that attract a dividend.

Personally for my circumstances I am not going to send a form in.

bigmondy

That's me right enough bh99 - not only that you were only 0.46% out with your swing prediction.... I jest of course.

If only they were to remain at that price beyond next week eh?

I hope you enjoy your cash bowlhead99 - you deserve it.

bowlhead99

bigmondy wrote: »

I hope you enjoy your cash bowlhead99 - you deserve it.

PLOT TWIST: the reason I am not sending a form in is because I am not a shareholder and have no financial interest in SL whatsoever.

Coveredinbees!!!!

I went for b shares as it is my only capital gain and was concerned that taking it as income might effect my child tax credits for next year.

hall40

bowlhead99 wrote: »

The company is worth what it is worth, based on a market view of its assets and future prospects.

If it gives a pile of money to each of its owners for them to put into their own individual pockets, what is left inside the company cannot possibly be worth the same amount of money.

If you have a full plate of cake in front of you and an empty belly, and you put some of the cake into your belly, and eventually pass it through the toilet, you will have less cake on your plate. So, you cannot both have your cake, and eat it.

The gain from SL running their business well and maximising their long term value by selling a part of the business for a profit has allowed the cake to grow in size. That was announced last year. That is like the cake cooking in the oven and then having someone decorate it, and is what has enabled you to be sitting with a large cake in front of you.

If you now choose to redistribute the cake by carving a bit off the cake to put into your belly or taking the decorations off the cake and putting them into your pocket to go and dress some other cake elsewhere, those events do not 'create' anything. The creation happened in the oven and on the decorating table, last year.

So: now the cake is cooked and dressed up and ready to be split into bits between what you have on your table to sell to someone else, what you have in your belly and what you have in your pocket. But the action of splitting it into bits is not going to give you a gain.

The good thing is that this is the type of cake that can be put back into the oven to grow. If you don't want the cake that you put into your belly or the decorations you put into your pocket, you can put it all back onto the pile on the plate and wait for the whole lot to get bigger and more impressive over time. Then you can take bigger slices off it in future years. There is of course the risk that it gets overcooked and you wish you had just eaten some of it now and sold the rest.

I have just over 1100 shares and it seems to me that I should take the c option Standard rate tax payer. Will I get a dividend payment after the conversion.
Help needed:j

bowlhead99

hall40 wrote: »

I have just over 1100 shares and it seems to me that I should take the c option Standard rate tax payer. Will I get a dividend payment after the conversion.
Help needed:j

1100ish shares x £0.73 payout per share = £800ish dividend to be paid on C shares