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ADV - have you tried posting on Crap Brokers R Us.com? You may find more people in your situation there.
That or #I can't understand why no one fixes my stupidity for me.
You're in the wrong place.
Thanks again Redtom - this is what annoys me - with I-web it shows as 0% tax charged, which is because they receive the dividend from Computershare purely as 70 percent of the declared dividend, ie no mention of what Computershare actually do with the 30 percent they withhold. We established that this only happens with DEC/DGOC because it is a US company listed on the London Stock Exchange, and W8-BEN can't be used in this case (although it works with brokers not owned by banks) ie the old anomaly I keep mentioning. Computershare won't communicate with retail investors.
Good to communicate with someone sensible (although I don't actually read this board much as it full of those people who usually stick to AIM ramping).
As for dustin - actually I did block you long ago - for some reason I temporary saw your posts. Sorry about that, don't really want to upset you, although even my cat doesn't like you, and he usually likes everyone unless they smell of wet dogs.
adv11/Ezio,
I've just checked and the 15% WHT appears on the annual Tax Certificate that HL sends you after the tax year has closed. In fact it was not in an ISA, just an ordinary share account.
The Tax Certificate has a schedule of 'Overseas Income' and clearly shows the 15% WHT as 'overseas tax'. This implies that this WHT was properly accounted for with the IRS. Obviously this is only as HL do it. I can't speak for other brokers.
My wife has DEC in both her SIPP and ISA and I can see that she only received 85% of the dividend in the ISA but the full 100% in SIPP. I need to take my own advice and move it from the ISA to the SIPP before the next dividend!
The thing you need to ask yourself Ezio is what is happening to the other 30 percent. If you are paying it to the US Government in withholding tax, you would get a receipt for that, it would show on your dividend receipt. So who is pocketing it ? Computershare I would guess.
It's a rat trap, and you've been caught !
Thanks Red Tom.
Thanks RedTom, a sipp with HL is definitely something I need to consider longterm. I only have a small holding in DEC and it’s in my iWeb isa so happy with it for the time being.
In fact the dividend arrived in my share account about 10 seconds ago. Nice to have some cash back from DEC and I can confirm no WHT. HL may not be everyone's favourite broker but they got this right.
Ezio,
Could you not put it into a SIPP and therefore have 0% WHT. I accept there is a cost but 3% of each divi would soon add up.
Adv11, agree with you regarding the 30% WTH, I’m with iWeb and completed a w8-ben hoping this would reduce the WTH to 15% but it is still 30% for me. Having said that, I’m happy to accept the dividend as 7% (rather than 10%) as i feel it is still a great return on my small investment, average 97p.
adv11, I'm sorry that you're having a wht problem.
All I know is that I correctly have 0% tax deducted as my holding is in a SIPP. I use Hargreaves Lansdown as they are pretty good in my opinion. Good luck resolving it but it might be more cost effective to move to a better broker.
Redtom my friend. Nothing is that simple. Before most people on this board had even heard of DGOC, I was spending months trying to get to the bottom of what is a massive anomaly in the US/UK tax laws. I never got anywhere despite promises from Teresa at DGOC, lies from my broker, and complete silence from the only people who know - Computershare.
The one fact is that any bank based broker (HSBC, Barclays, Lloyds, Halifax, I-web etc) gets paid the dividend from Computershare with 30 percent tax already deducted, and they pass it on to their clients without any tax information, so the client gets 30% less, instead of 15 percent less.
I must have been through this 20 times on this board when newcomers keep asking, and most people on here must now have me blocked. The only thing I gained was compensation from my broker for "misleading me" that they knew what they were talking about, and as far as I know, non of the brokers have ever got a reason themselves, let alone a tiny little investor like me.
It also became apparent that some of the new, app only brokers, are receiving and paying out the full dividend, no tax at all, and I am fairly certain that it will result in an eventual invoice from the US tax authorities.
Just watch - next week a few people will be coming on here wanting to know why they only have 70 percent of their dividend, and no one will answer them.
Yes, of course I could move my holding, change brokers. It would all cost me money, if I ever get in profit, I will probably dump DEC. Great for dividends but never going nowhere because it will always have a thirst for more cash.
I do thank you for taking an interest and trying to advise - you appear to own half a million DEC shares ? - but it is such a complex problem. It isn't so much the money, it is the injustice that only a few of us suffer, and as we are such a minority, no one cares. I believe that DEC should invest a little money and pay someone to look into the problem. Unfortunately their motto "Every cent/penny counts" doesn't extend to their small investors.
Don't waste your breath in this poster
Winging about paying 15% on a 10% divi cause he has a shiit broker change it clueless one
adv11, I have not read the tax thread but the rules are reasonably straight forward.
Normal WHT rate between US:UK is 30%. Under the double tax treaty this is reduced to 15% on divis under normal circumstances (ie share account, ISA etc) and reduced to 0% for pension related holding accounts such as a SIPP.
Hold them in a SIPP if you want full payment, otherwise accept only 85%.
It is to those of us holding in ISA's with a broker owned by a bank, but please don't mention it on here because
a/ those not affected don't care, and
b/ they go absolutely ballistic every time some mentions it ..... wait for it ......
adv11, what tax problem? Are you talking about withholding tax on the divis? If so, it is not a real problem.
Just don't mention the massive tax problem. Shush!!!
If green was still flavour of the month .... renewables would not be in a 6 month sell off.
Energy is taking a battering at this point. DYOR.
Redtom I like your analysis - however, if the directors focus on growing market cap rather than the share price PI's will not benefit. I am certainly nervous of a repeat but am holding for now.
RedTom - I think there are a few elements at play.
Some funds / investors see DEC as a dirty, non-green company (I guess that is partly why DGOC became DEC and presentations labour on green closure of exhausted assets). But we're never going to be popular dragging carbon producing fuels out of the ground.
The share issue surprised me and as per comments below I felt a bit annoyed that new shares were on the market at a price lower then the market price and I wasn't invited to buy them (other cash raises IAG, Kier etc have given priority to existing share holders via a rights issue).
I guess you could misunderstand the business model as merely buying up wells with rapidly declining assets and miss all the better management / efficiency savings etc.
Next divi hitting accounts will allow existing holders to top up at these levels, maintaining the bottom if not increasing the share price. Might be a step up tomorrow as a result.
Temple, I do think this is a bargain and I have been buying heavily the last week or 2. I am way over-weight in this but accept the risk/reward balance. £10.3k dividend tomorrow will soften the blow a bit. But I'm still down as my average is around 108p.
Good analysis Redtom. The only thing I can think of, is that the way the fund raise was done, has scared off some shareholders. A very quick fund raise and a lot of loyal share holders may have felt they were excluded. On top of that, all those who bought into the company +110 SP were probably quite angry that DEC valued itself a lot lower than them. A bit disappointing as DEC had always spoken about looking after and rewarding loyal shareholders.
Anyway dividend paid tomorrow ... nice :)
Markets can stay irrational longer than some people can remain solvent.
If you think this share is a bargain, buy.
I'm a bit puzzled by this one as I have done a lot of research. Let's do some basic maths regarding the acquisitions and funding before adding in some of the other variables.
Prior to fund raising SP was 122p giving MV of £863.4m (708m shares). So this was the value of all of the existing businesses etc as determined by the market. DEC decides to raise £159m by issuing 20% (142m shares) equity at 112p. Firstly let's assume that they retained the cash (ie no acquisitions). They still have the existing business (£863m) but also have £159m in cash. These 2 assets are 'worth' £1022m spread over 850m shares. This equates to 120p. And this makes sense as the existing shares were diluted by the discount offered to new shareholders. So from a pure mathematical perspective, we should have been at 120p.
But the cash was not kept as cash, it was spent on 2 acquisitions. There is a very detailed analysis of the impact of the 2 acquisitions (there is a link in another thread) and these acquisitions are accretive in earnings & cash. So again applying logic, the company is exchanging cash for more lucrative assets (as compared to its existing gas assets) which implies that the add on value should be proportionally more. Therefore the post-acquisition SP should be north of 122p with everything else remaining unchanged. Of course there are multiple other factors to consider.
On the plus side, gas (and oil) prices continue to rise which should increase value of DEC as hedged income can be obtained further into the future at higher levels. Equally similar assets re available in new fields at very cheap prices (various reasons for this, inefficient for the big boys, bigger companies becoming greener so selling 'dirty' assets etc) and DEC now has capacity to make bigger acquisitions (but only if they fit accretive criteria).
On the downside, fund raising spooked shareholders perhaps forcing some sales? Perhaps the markets do not believe the accretive nature of the acquisitions (they obviously carry risks). Are the markets worried that DEC will overstretch itself both operationally and financially? are 'dirty' companies like DEC simply falling out of favour with big institutions?
So what have driven the SP to 103p from where it should be (mathematically) of approx 125p?
I'm struggling to find logical answers to this question. Any thoughts people?