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Hi MrBond007,
The new shares were issued at a stated price of C$1.70, which was at the time, as near as dammit 100p in UK sterling. By the time these shares appeared in peoples account they were worth a good bit less. And to confuse matters further, some banks and brokerages took much longer than others to credit these to their investors, while the price dropped further.
So how do you interpret the company's statement?"
"The value of the dividend will be equal to the market value on the date of the transfer of Demerged Aclara Shares to Shareholder...
Should it be C$1.70 for the official transfer date, or C$1.45 or even C$1.35 on the actual date these shares appeared in your account? You may well be able to argue for the lower value with the Inland Revenue.
However, if the taxman accepts a dividend value of say C$1.45, then that becomes the purchase price when you eventually sell these shares. So if you sold them at C$2.00 you would have made a capital gain of C$0.55 per share. Whereas if you had accepted the company's C$1.70 dividend valuation then you would have only made a gain of C$0.30 per share.
I have decided to keep it simple and have recorded the dividend at C$1.70 converted to UK sterling as 100p. Hence for tax purposes I purchased the Aclara shares at 100p each.
Dark night I would say not crazy but logical. We have just had what is in effect confirmation of another Profit warning, with forward guidance halving profit this year if gold and silver stay level, plus another hedge that reduces silver exposure, resulting in analysts’ share price reductions. The guidance says 360k oz at $400 an ounce profit less 50% tax equals around £50m profit less extra capex so share price and valuation seem around right particularly when you add in political risk but if we continue to plummet maybe there is some horrid politics that those in the know are already aware of?
why the massive fall from Gold and silver moving up ? last week it hit 130 and now down by 20% ..crazy.
Ps the only silver lining is with Aclara as usual with Hochschild you can make a massive capital loss and no chance of paying cgt. But if that is the best you can say….
Yes it is truly horrid, I pay 38.1% dividend tax, so on cad $1.70 that they were overvalued at so I have to pay extra tax, I pay 65cents tax so will only get $1.05; but the price has fallen to around $1.25 so I am getting $0.20 for each $1.70 share so my tax rate 90% approx ($1.5).. And I haven’t been able to sell at a better price as Barclay’s still refuses to deal them. I think pretty appalling of Hoc to think so little of private shareholders.
Any other reason than the horrid forward guidance, resulting poor analyst views and dreadful treatment of private shareholders for the price collapse as silver and gold rise that anyone can think of. Thanks. I have stuck with this company a long time so this treatment of us is most upsetting to me.
Thanks very much kenj. So I guess the price for dividend purposes / ultimate (sale & gain calculation) is CAD 1.70. Is that your understanding as well?
MrBond007, this is from page 23 of the demerger document on HOC's website.
"For Shareholders who are resident in the UK for UK tax purposes (a “UK Shareholder”), the distribution of Demerged Aclara Shares as a part of the Demerger will be treated as a dividend. The value of the dividend will be equal to the market value on the date of the transfer of Demerged Aclara Shares to Shareholders of the Demerged Aclara Shares to which they are entitled.
Impact on individual Shareholders within the charge to UK income tax (an “Individual UK Shareholder”)
All dividends received by an Individual UK Shareholder will, except to the extent that they are earned through an ISA, self-invested pension plan or other regime which exempts the dividends from tax, form part of the Individual UK Shareholder’s total income for income tax purposes and will represent the highest part of that income."
Any Capital Gain will only come in when you sell your Aclara shares. However, as they are trading at around C$1.30 and were issued at C$1.70 you would be looking at a capital loss if you sold any at this time.
Apologies if this has already been answered but….
Does anyone understand how this is ápportioned´ Or declared on self-assessment?
Thanks in advance hopefully.