Receiving dividends when transferring out to another provider.

tel_

If you hold funds that are not accumulating, but pay a dividend e.g VUSA, what happens to your dividends if they are paid whilst your funds are sitting in the holding (custodian) part?

I thought no transactions/activities are supposed to take part during this process?

EthicsGradient

I'm not sure what you mean by "the holding (custodian) part". Dividends, and distributions from OEICs, have a defined day, for which, if you own them at the end of business, you're entitled to the dividend. The actual dividend will be paid some time later; if you transfer out, it is possible that the dividend will be paid into the old provider account after the transfer of everything else has happened. The old provider must record that, produce a tax certificate that includes it (and that goes for accumulating funds too), and either send you the money, or forward it as cash to the new provider.

If the transfer is recorded as happening a few days either side of the ex-dividend date, keep a close eye on both providers.

dunstonh

If the dividends are normally paid to your cash account, that is where they will end up.    Some platforms do a mop-up transfer 6 months later.  Others need a prompt to do it.

If the dividends are paid out to your bank account then that will happen.

tel_

Thanks to EthicsGradient & dunstonh for your explanations.

I have recently transferred out all my monies from Vanguard to iWeb, but don't hold any dividend-paying funds, so was just curious as to what would happen if I had.

ColdIron

tel_ said:

I thought no transactions/activities are supposed to take part during this process?

I'd be pretty dischuffed if someone else half inched my dividend

tel_

ColdIron said:

tel_ said:

I thought no transactions/activities are supposed to take part during this process?

I'd be pretty dischuffed if someone else half inched my dividend