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

bigmondy

Stupid question alert - if you are signed up to the DRIP - why does the dividend not get reinvested?

Should I be embarrassed asking that and get out of holding shares

gt94sss2

bigmondy wrote: »

Stupid question alert - if you are signed up to the DRIP - why does the dividend not get reinvested?

Most simply, as the company is not offering DRIP as an option for this particular special dividend.

Regards
Sunil

bowlhead99

The DRIP is a handy program which allows people who are getting one or two percent of their share value in dividends from their ordinary shares, on a couple of timetabled dates a year, to have that cash re-invested into new ordinary shares at the going price for half a percent or so in commission.

People will sign up to that system or not, based on whether they prefer to receive what might be tiny dribbles of money from time to time, or just get some shares. It might be 10 or 11p for the final div but only about 5 or 6p at interim.

Now there is a great big special one off return of the company's assets which will be more than ten times the size of a typical interim dividend. Peoples preferences to have divs reinvested are unlikely to be the same for a special 20% return of 73p, as they are for a typical 1% return of 5p. To avoid peoples preferences to reinvest ongoing little bits of money being carried over into this huge one off return of a big slice of the business, they have said that the DRIP does not apply to this round. If you have lodged a preference to normally get DRIP shares, this time you will get a cheque.

The DRIP will carry on as normal for the next normal ongoing dividend that gets paid out in May.

bigmondy

Understood guys. Thanks again.

Nigel901

I am a higher tax payer with 855 shares and have all my 2014/15 Capital Gains allowance available.
If I take option B (planned option) am I taking my 73p dividend (£600+) as a capital gain AND retain my share holding at the new 9/11 issue 699?
I appreciate this might appear stupid but I don't do shares! I'm just trying to understand that I'm not redeeming the 73p AND my shares with option B.

gt94sss2

Nigel901 wrote: »

I am a higher tax payer with 855 shares and have all my 2014/15 Capital Gains allowance available.
If I take option B (planned option) am I taking my 73p dividend (£600+) as a capital gain AND retain my share holding at the new 9/11 issue 699?

yes, that's right. In your case option B would be best to receive the payment and you will keep 9/11 of your shareholding after the consolidation.

Regards
Sunil

missymouse

I have this letter as we have standard life shares. Do I do nothing and we get some money. Is this the best course of action.

thanks I haven't read whole thread (or much of the letter) but that is the vibe I am getting.

bowlhead99

missymouse wrote: »

Do I do nothing and we get some money. Is this the best course of action.

If you do nothing you will get some money. It is one course of action. Another course of action may result in you paying less tax. It depends on your circumstances.

I haven't read whole thread (or much of the letter) but that is the vibe I am getting.

Reading the thread or the letter would be the best course of action.

Muscat63

I am rather late to this party as I've only just discovered this forthcoming change, having lost touch with Standard Life during various house moves. My husband still gets the dividend payouts though.

I understand we will get 9 shares for every 11 we currently own (so 555 instead of 679, or thereabouts) and that these new shares will in total have the same value as the old ones. So there's no loss and no gain to us, as far as I can see.

Do we also get a little cash payout of some sort? We are standard rate tax payers and we are currently on the default option.

Thank you in advance to anyone who can confirm/deny/enhance my understanding of the situation!

MARTYM8`

Muscat63 wrote: »

I am rather late to this party as I've only just discovered this forthcoming change, having lost touch with Standard Life during various house moves. My husband still gets the dividend payouts though.

I understand we will get 9 shares for every 11 we currently own (so 555 instead of 679, or thereabouts) and that these new shares will in total have the same value as the old ones. So there's no loss and no gain to us, as far as I can see.

Do we also get a little cash payout of some sort? We are standard rate tax payers and we are currently on the default option.

Thank you in advance to anyone who can confirm/deny/enhance my understanding of the situation!

If you are basic/standard rate taxpayers its probably easiest to just stick with the default C option i.e. get it paid as a dividend as the tax is already paid in effect.

If however you are a higher rate taxpayer and haven't used any/all of your capital gains allowance it might make more sense to take option B - i.e. get the payment as a capital gain. Cos if you stay with the default option C you will need to pay extra tax on the payment.

Hopefully I have got this right! I have gone for option B - as I am a higher rate taxpayer and don't have any capital gains this year bar that.