We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
But the point is Russia will want a cut. Avoiding paying Mr Putin whether legal or not is not gonna work out too great in the long run I think.
Posted yesterday
Many ways to get round corporation tax legally by the company
Google
Hive down, hive across
Spin off, split off
GLA
Jambo. Yes, Dividends are paid post corp tax. So essentially they are taxed twice when personal income tax is taken into account.
The gain on disposal of asset will be subject to corporation tax. This will be a disposal by the Russian entity holding the licences. Corp tax will therefore be paid on Russia. Then the EUA group entity will paid the remainder as dividend after holding back cash requirements.
Happy, that's great, but only due to favourable DTA.
I'm only commenting on normal UK tax and can't begin to fathom what the residency status and country of residence is for the BOD.
Has the question been answered regards CORPORATION TAX , does that get applied to sale proceeds before they can pay any dividend?
Thanks Happy, my point exactly. You're paying tax, probably due to interaction of double tax treaty and both because you are NR.
It really doesn't. The general position in the UK is tax is due on UK dividends irrespective of Domicile or residency. The dividends are UK sited and therefore the first right to tax belongs to the UK. Domiciliary is more focused on keeping foreign income out of the UK for resident individuals and is not applicable if you are non resident.
Not sure how I can make it simpler. Happy to be proven wrong, but would appreciate some legislation.
Anyway, we really have deviated here. Simple fact is income (dividend) is generally more heavily taxed than capital gains. Therefore, I am confident that they measured this impact and thus the significant dividend will be significant.
@James, EUA is a UK registered company and any dividend payout would be subject to UK tax, as a UK sited asset.
@Panino / Martingw - the personal tax payable by Directors on any dividend or share sale will depend on where the Directors are domiciled for tax purposes, not the location of the assets or the company listing.
I think you are getting confused with corporation tax liabilities for the company and personal tax liabilities for the Directors.
The licences and the assets are owned by the local Russian company. I believe the disposal will be taxed at source in Russia, this makes sense for the state. The dividend tax to individuals is on top be it in Russia or UK.
The alternative of selling the whole company would only cost stamp duty on the shares acquired in the UK. It's fair Russia wants a slice of the pie.
Martingw
Yes there is as from 06/09/2006
Aspen
CAW1.
We both thought the same but your post just got in first.
Aspen
Anyone know whether there is a tax agreement between UK and Russia whereby any Russian national earning money in UK don't get charged additional tax in Russia?
Martingw
But EUA are a UK listed company, so wouldn't UK tax rules apply.
Aspen
EUA is under uk tax not Russian. Russia will tax what comes out of the ground.
Many ways to get round uk corporation tax legally by the company
Google
Hive down, hive across
Spin off, split off
GLA
In response to 3) above, a quick Google check says that in Russia dividends attract a 15% tax rate, which can be reduced to 5 or 10%.
On the other hand, the sale of shares in a company that have been owned for at least 5 years, has a 0% tax rate.
I think the BOD would prefer the latter!
Put yourself in the shoes of large shareholders, that are also BOD members, then ask yourselves:
1. Would they chose to dispose of substantially all of their assets, in favour of a full company sale if they did not expect to have material value in the remaining company and share holding?
2. Would they devalue their current shareholding voluntarily, without knowing full well that either the payout or future share price will more than compensate the decision?
3. Appreciate that this may not apply to the BOD (probably tax efficient), but taking a dividend would mean a UK income tax charge of 38.5% v potentially 0% (20% if chargeable) on CGT. Therefore, wouldn't the asset sale offer not need to be at least 38.5% (18.5% if subject to CGT) more favourable, overall?
3. Are they and have they not spent a great deal of time to develop EUA and continue to focus on its future?
Risk of bottom line aside, I can't see any downside to holding in EUA, I also remain confident that there will be a large payout in the short term and a share price of at least the current level by the end of 21.
Anyway, I'm no expert and probably of point, but I'm just trying to say, charts, fundamentals and anything else aside, logic tells us that EUA will deliver on their promise of a significant dividend and will continue on to create a huge company value in the next few years.
Good luck all. Exciting times!