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I don't often disagree with LTI (ducking and dodging a lightning bolt :-) ) but I still don't see this as being a return of capital. Firstly, Tesco has shaped this in such a way as to meet the HMRC rules. On this, given their track record, Tesco will have crossed Ts and dotted Is with the agreement of HMRC. No way will they push boundaries with this. Secondly, think about it. The special dividend comprises two parts. The capital element, a portion of the NAV for the two businesses and the profit element, the amount of money that was paid over and above the value of the asset. The profit element, which was detailed in the original circular, should surely be treated as a dividend in the usual sense of the word.
For once, I was disappointed with the gov.uk web site. It doesn't mention SIPPs as being a tax wrapper for dividends. Neither could I find the term Special Dividend or Return of Capital in this context.
EQ
I shall repeat my reply to your 14.07 post. Let me know what you don't like about it.
eq
''Longtimeinvestor - looking at the sp over the last few years, when was the 51p added in value to it? ''
The value from the Asian asset sale was incorporated into the Tesco market cap.The share price has not reached near 300p in recent times. I had earmarked to sell some shares at 270p which it also hadn't reached. You may be looking at a graph that has been put out by the return/consolidation as per the link showing the share price at over 300p just a couple of weeks ago.
https://uk.finance.yahoo.com/quote/TSCO.L?p=TSCO.L&.tsrc=fin-srch
The Tesco share price has held up well since the start of the Covid 19 market sell off mainly due to the asset sale and what was to be done with the proceeds.
Eq
If you don't like an answer to your 14.07 post, which obviously has embarrassed you by exposing the inaccuracies contained within it ,then that is something you need to deal with , rather than try and deflect away from the issue. If you are going to post then try for it not to have flaws.
Agreed Equilibrium although I learn a lot from LTINV whether its good or bad. Hes probably a bit miffed over the reduction in his share holding as we all are. It would have been nice to have the SD as a "free dollop" and taxation free, but we may have paid for it via a huge drop in Tescos share price as is usual just after payment of divis.
As it happens, and onward improvement the share price has held up well so far and is "promising" a rise, given the potential for a very good final years results.
Ade - I suspect a fair few shareholders will unwittingly go over the £2000 tax free dividend allowance. It was previously £5000 before the then chancellor Philip Hammond pared it down ruthlessly after many invested large sums based on the assumption the then £5000 was likely to be permanent.
That oversight on the possibilty of exceeding the allowance will be despite the lowering in dividend income due to the Covid crisis. About half the firms Im invested in (about 6 companies) cancelled their divis completely and have so far mentioned nothing about when they are likely to resume eg Taylor Wimpey,Redrow (though Persimmon had a sizeable divi)
The huge Tesco SD is illustrative of the swings and roundabouts that is inherent share investment for income. Alrhough to be fair there have been a fair few opportunities for capital gains when the market was at its bottom last year eg Royal Mail, Royal Dutch Shell.
Prussell - "smaller shares held will see smaller divi paid"????
EPS rise should result in higher divi paid even if divi held at previous years final ?
Fluffy - next divi to be announced after final results announced for year end 28.02.21 (qualification date) will be in late May and paid in July - following pattern of last financial year. Natually its the QD to aim for - you still get the divi if you sell between that date and actual payment date.
Sorry, that was supposed to be a 'smiley face' at the end not '??'.
ECRyder, on the contrary. I just had a look at some NG posts around that time and the tone/content is pretty similar ??
Glad to see posts moving forward to position after Spec Divi situation. for future dividend, it is the "pot" which needs to be increased or maintained. By doing so, smaller no. of shares sharing will see increased divi per share. If the divi ammount is maintained, perhaps with a small increase then the smaller shares held will see smaller divi paid. So again, care on dividend position. TSCO will need to declare the dividend pot being paid out. If it offers a value per share then taking away 23% of everyones holding will need to see the div increase by same amount to stand still. Personally I dont see dividend increase showing 25%. Overall, it seems most see this as a disappointing result, and I am one of them. I know my numbers and see potential future benefit, but I didnt get the spec divi in cash when you factor in tyhe consolidation, nobody did, so all in all happiness scale shows 5/10. Like my school reports said " must try harder" & "could do better" which is how I see this issue on behalf of TSCO .......
Longtimeinvestor I find your manner and insults regarding people asking questions as not having brains and being thick quite obnoxious and rude. You are not the oracle on this share, or I imagine, anything at all. People are genuinely asking questions and giving their opinions. If you are so clued up then I do not see why you need to read this board or contribute as you obviously are privy to every bit of information already. I suggest that you lay off other people on this board or go and have a time out. Maybe have a nice walk tomorrow to clear the head.
Excuse my ignorance but what is the timing for the next dividend and what payment date would it realise
It’s a normal dividend and in no way a return of Capital! Book cost on holdings are the same. Anyone who has a dividend that must be taxed should pay it and be glad of their chicken dinner, cos everybody who got a dividend is a winner!! It’s money you never had before and last time I checked tax rate was much less than 100%. Hell.....if it was I could do some real damage and you would all know it!! Wink wink, nudge nudge ;)
FT 100 index showing a steady rise today heading near to 200 points higher. Its all good news.
BTW I can not remember the National Grid divi/consolidation , a couple of years back, ever attracting this level of interest/confusion/share chat/controversy.
We are back to sanity as HLs Tesco data is showing a day rise of 3.45p (1.42%) on their new nominal 6.33p nominal value Tesco factsheet.
All seems to be going well.
Keep chipper lol
Don't worry everybody. My shares have also disappeared from my Fidelity ISA account. I'm sure there's just a few things pending and all will be OK in a day or two. No need to panic as these are a log term hold anyway. When I get my pay out I will decide (if the price is right) whether to buy more TSCO or something else.
Well thats a relief. I Will wait then for more info. Have contacted bank in the meantime
Ade....if you look at the gov.uk link Tig sent about an hour ago that outlines the process you need to follow very clearly, it is paid via your tax payments through the following financial year , not necessarily a one-off payment...you have to inform HMRC you have exceeded your limit and are liable to pay tax. Have a look at the link, it really is a one-pager and pretty clear.
A
If normal dividends income is normally paid straight into your bank account, then that may suggest that your provider is classing it as a return of capital.
Thank you. I guess what I'm saying is that the special dividend is getting paid into the "cash" part of my shareholdings and not into my bank account. So is the tax payable if and when I withdraw it? Or when its credited to my stocks and shares cash holding account? Ive never gone over the 2k tax dividend limit before so its never reared its head for me.
s1
''Does anyone know when this will be sorted.''
No. You won't know what is happening until you contact your provider.
I use HSBC who have yet to adjust for the consolidation. I will relax and wait until they have. Not worth any concern.
As from about 3 pm this afternoon the whole value of our Tesco shares vanished from our bank portfolio - a previous value of over £25,000 in our portfolio is now standing at 0.
Does anyone know when this will be sorted.
Tig
''The declaration that the proceeds from the sale of the Asian business would be paid out to shareholders DID NOT result in an immediate 51p rise in the share price.''
Why would it?
you need to go back to school.
Does anyone expect an immediate spike in share price equivalent to the next declared dividend amount?
f77
''there was no need for this special dividend''
thanks for your irrelevant opinion.
Better to have an opinion before a decision has been made and agreed.
Tig
''you are constantly searching for confrontation''
It's called education. No need to thank people with that.
If you want to continue with misconceptions then I and maybe others will let you get on with it.