Dividend Reinvestment charge

Fuzzythinking

Hi

I just found out that when reinvesting your dividend in your Halifax ISA Stock and Share account, the Halifax charges you for commission and stamp duty which is really annoying. It makes sense why my cost of share rises everytime I reinvest my dividend.

Is there anyway to avoid being charged when reinvesting my divideds?

Fuzzythinking

ColdIron

Nothing you can do about stamp duty, it's levied by HMRC. Could you accumulate the dividends and buy once a year or so?

Fuzzythinking

ColdIron wrote: »

Nothing you can do about stamp duty, it's levied by HMRC. Could you accumulate the dividends and buy once a year or so?

I am not sure how this process works. Could you please give me more details?

Kendall80

Fuzzythinking wrote: »

Hi

I just found out that when reinvesting your dividend in your Halifax ISA Stock and Share account, the Halifax charges you for commission and stamp duty which is really annoying. It makes sense why my cost of share rises everytime I reinvest my dividend.

Is there anyway to avoid being charged when reinvesting my divideds?

Fuzzythinking

Can you not use accumulation units? Then the dividend is automatically re-invested for you.

bigfreddiel

Stamp duty will be the same regardless, so you can ignore that, but you should find that the dealing charge is at a very low amount for a reinvestment of dividends.

For example TD Directinvesting charge £12.50 to trade, but only £1.50 when its a reinvestment trade. I think others do the same.

Or as suggested go for accumulation funds/etf's

Cheers fj

Fuzzythinking

bigfreddiel wrote: »

Stamp duty will be the same regardless, so you can ignore that, but you should find that the dealing charge is at a very low amount for a reinvestment of dividends.

For example TD Directinvesting charge £12.50 to trade, but only £1.50 when its a reinvestment trade. I think others do the same.

Or as suggested go for accumulation funds/etf's

Cheers fj

I am not in favour of using fund manager where it uses accumulation unit.

I selected my own stocks.

ColdIron

Fuzzythinking wrote: »

I am not sure how this process works. Could you please give me more details?

I assume you are talking individual shares, what sort of sums are involved? What are the charges? Who do you hold them with?

There is nothing you can do about stamp duty so forget it. As bf says many platforms have reduced charges for regular purchases or reinvestments. You can't eliminate all charges but you can make sure the charges are reasonable, what are your charges?

bigfreddiel

Fuzzythinking wrote: »

I am not in favour of using fund manager where it uses accumulation unit.

I selected my own stocks.

How did you select your own stocks? Do you have any particular methodology or particular criteria?

Cheers fj

Ifts

Fuzzythinking wrote: »

Is there anyway to avoid being charged when reinvesting my divideds?

If the dividend reinvestment charge is the same as their normal charge for placing a trade - then reinvesting small amounts at that price wont be worth while. Can you not wait and collect up the dividend payments to an amount that is worth placing a trade at.

Or you could leave the dividend payments to build up in the account and add them to your next trade using new money.