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Many companies will issue special dividends, some almost yearly. These are treated as ordinary dividends. With the sale of the Asia businesses, there are two elements. The first is the return of the asset value and the second is the profit made on the sale. One is simply a return of your original money (asset value), the second is the balance (the profit).
I have looked at the circular but can't remember seeing anything about tax implications. I would certainly expect the profit element to be subject to tax. I have surfed the web extensively and can't find anything UK based which is sensible, not even on HMRC web site. I have also written to various TSCO Directors regarding this.
Noticed that Sbry share price surpassed Tsco just now so did a comparison chart of the two . Over the past year SBRY has soared vs TSCO. longer term TSCO has outstripped but the huge underperformance in Tsco warrants consideration surely?
It cannot just be market sentiment after all tesco has boomed allegedly during the pandemic ... so not sure why the disconnect.. any ideas please
I believe it comes down to how the company categorises it. If they are conducting a return of capital this is different to a dividend. if it's called a dividend, it's a dividend and should be treated as..... you guessed it....
Just my simple take on it. Not an accountant, or tax advisor.
Regardless of whether you consider investing gambling.
Jaff asked - profits from gambling are tax free?
Answer - for you as an individual yes, if you win big on the horses through William hill or any bookie yes, if you win the national lotto* yes.
However - for William hill and any other bookie they not only pay corporation tax they also pay a gambling levy which is an additional tax on profits between 15-50% depending on the type of gaming. So HMRC still get their share. If the HMRC didnt do this then you would be able to win more because the likes of william hill would not need to absorb this cost so could decrease the spreads on the bets.
In summary - gambling is taxed but you dont notice it, its effectively taxed as source like your pay slip. if it wasn't taxed then you would be able to win £1.15m on the lotto for 5 numbers plus the bonus rather than £1m
*(Although I believe if you win on one of those scratch cards that pay 10k for life or anything for life that actually is classes as income because its a recurring payment)
It would appear that way Spindler, most occurrences priced in as forecasted last year, Brexit, Biden Lockdown etc
The trading range seems to be incredibly narrow of late(is there no edit function here ?) ...sign of solid support ? City Boys and Institutions on the brink ?
The trading range seems to be incredibly narrow of rate ...sign of solid support ? City Boys and Institutions on the brink ?
Tesco made the sale not you. Tesco will treat it as a business disposal for tax purposes. You are an investor. You should treat it as dividend income as that is what it is. Do what ever you fancy on your tax return. Good luck if you get caught, but I'd take advice, sounds like tax evasion to me. If you haven't made use of Isa wrappers then do so. If you have, well you are probably sufficiently wealthy, probably not worth the risk of engaging in tax evasion.
bbrinkw...your take on it all is just what I have come to the conclusion of ......My problem with all this , is basically that after consolidation my reduced number of shares divided into the cash I invested has a much higher break even ( up from 2.35 a share to 2.94 a share .!! which means I might have to wait a long time to move out and into something else .whilst I think Tesco is a good share for now , I see weakness ahead when lockdown ends and the glorious turnover subsides.
BB, LTI
Well that is for you to decide how you wish to treat your money . If you have not protected it in the months since you first heard about the circular then that really is your problem.
LTI , you purport to be a knowledgeable investor in the other place so I assume that your comments are simply mischief making for whatever reason.
how the proceeds from the sale of an asset can be classed as income.
Just imagine investing £10,000 in a company and then a couple of weeks later the company sell 50% of their assets which they then return to shareholders. You would be getting back £5,000 of the capital that you have just invested. How could this possibly be classed as income for tax purposes.
I will be classing the return of money from the Asia asset sale as a return of some of my capital that I purchased Tesco assets with in the first place.
Investing is really a gamble (on the stock market). Always has been.
There is no tax to pay (unless you cash in your "bet" and make a profit).
You can make £12,300 before you start to pay tax .
"Gamble" in an ISA and there is no tax to pay.
Gambling is a matter of chance. Investing is not.
Found something on it, but cba to read it all. I'm sure options were explored with regards to how to return the cash.
The fact that it's not usual way to return cash probably means it's either on risky ground in terms of tax evasion.
ggplyr: Just saw your question. I have copies and pasted my message of a few days ago below. You can also click on my name and look for my previous post on TSCO regarding the "Capital Return" issue.
Posted in: TSCO
Posts: 339
Price: 240.80
No Opinion
RE: Sp14 Jan 2021 16:24
The Vodafone sale of Verizone may have had some technicalities which were different but I`m not sure of all of them except with the Verizone deal shareholders were also given some shares in Verizone and perhaps that is the reason why Vodafone could call it a "Capital payment / Return" instead of Dividend. !
Anyway I`m sure its too late to change this now and I don`t think, little old me writing to TSCO will change anything since they have far cleverer people to advise them and if they could have done a "Capital return" I`m sure they would have. But "food for thought" for future sales.
Have you got a link to explain what you mean by capital return or an example of it happening.
While they are tax free a gambling levy is applied which is paid by the gambling company, but ultimately the customer pays of course.
Taxes have to be raised from somewhere, capital gains tax is levied on the wealthy (relatively few will exceed the capital gains tax free amount)
Just a general question here: I believe any profits from gambling including lottery and betting are tax free in the UK, is this correct ?
If so, surely what we are doing here is the same: Ie: betting & gambling. So how come the profits (above the Capital gains allowance) are taxable ?
Realistic answers please. Thanks.
I see there was a sea of blue buys of fairly large amounts at the end of the day. I wonder what has prompted this ?
Any views on this ?
Perhaps as I had suggested before, TSCO have decided to rename the dividend as "Capital Return" so PI`s can avoid paying tax on a "dividend" ?
A share buy back for 20percent of market cap would take a very long time.
And so those little A trades are now replaced by large volume O trades. :)
Share price calculated to remain the same after consolidation.
So , after consolidation, same sp but less shares.
Say 1000 shares consolidated to 850 shares.
Same sp but hold 150 shares less( but compensated by the special dividend).
Your share holding after consolidation is not as much in sterling but you have a dividend to compensate for this.
So you do not win either way - if the sp stays the same.
Unfortunately, the sp usually drops. So you start scratching your head. Is this smoke and mirrors and you ask: why is it important to keep the sp the same?
Thank you everyone who responded about saye let's hope we have a good year keep safe
After reading the copious dialogue on all of this am i looking at this too simply ?... SD say 51 per share..then Consolidation. I don't think that 51 p is in the current share price plus after consolidation you still have the same percentage of the company you had before plus the dividend. If so that's win isn;t it ? Why on earth did they not opt for the tried and tested buyback...heck companies borrow money to buy their own shares...Tesco are in the unique situation of not having to do this. They are obviously comfortable with the current debt liabilities or else they could use the sale money.
If share price remains the same after consolidation, those on SAYE able to buy the shares at the SAYE option price e.g. Dava at £1.51 would benefit from the normal dividend as dividend yield % will increase due to less no. of shares in the market. So instead of ~4% yield, it's more like ~5% yield after consolidation. Of course this assumes that the total normal divi amount the company pays out stays the same. There may be a clause in SAYE saying the option price is prior to any consolidation, and option price may change after consolidation, better check this out.