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There are many people,myself included who have a decent holding and will receive a good dividend.Spare a thought for those who have lost their jobs and in some cases their homes and those who have no means to pay their rent,i know a few.
Be thankful we are not in that position
Yes but did they save for a rainy day ? Covid will have cost the wife 50k over the two years we might struggle to remortgage in the future as it’s based on wages , I’m on less due to being bumped out of my job, But I piled in when the times was good and have a buffer and haven’t splashed out thousands on holidays or flash cars clothes, yet you see some on the telly and they have a 50 inch telly ; sky , iPhones flash clothes and moan about state aid , yes not all are like this but surprisingly there’s quite a few. , heck I remember watching one interview she had a half pint in her hand!?
I worked for Tesco for 19 years, and after shutting my depot, and making us all redundant, Tesco really looked after us all, I earned really good money for 19 years and they went above and beyond to look after us, the special dividend will not be detrimental to shareholders, in these strange times we live in, we are invested in a profitable company, with a good bod, I think 21 will see us at £3+ including SD?
I like this board. Decent people with real world views. Some boards seem to have had a humanity bypass.
The depot’s I agree your looked after really well and unite union do a good job
Sadly stores seem to be less looked after and Usdaw are in bed with Tesco,
Two different worlds in the same company hence the equal pay claim going through the courts,
So many people are on 12-21 hour contracts “ flexi as well “ Tesco could pay the same overtime rates as the depot and I don’t think many would get over 36.5 hours to get the decent rate as Tesco can flex others before they get there reintroduce the bonus , Bob’s your uncle no problem.
Otherwise you get what happens in that no one’s interested in overtime at Xmas , so they came from the depot ( as it’s a mile away )to do some at £16:50 an hour as one boasted compared to £11.which went down like a lead ballon and they needed help to finish the aisle where as the regular person would of done it and cheaper ,
I just don’t get Tesco’s logic sometimes.
to receive the special dividend hopefully in February, when would you have to have been on the share register??
I am all for getting a fair pay for a fair days work. Rather being critical of the company you should also look at the positives.
My understanding is that employees got a bonus this Christmas not to mention any staff discounts at the till. It also recognises employees strength and the opportunity to progress their way into managerial roles.
Retail has had enough ‘bashing’ in the last few years, TSCO has given many people young and old a secure future.
I know many people that would be grateful to work even though it may be at the minimum wage rate.
Employees didnt get a xmas bonus this year
Dava
No, they got an extra 10% payable shortly
Has anyone worked out what the Tesco consolidation ratio will be .
As I understand it they will consolidate the shares to create a 50p uplift in the share price , when it goes ex dividend for 50p.
my maths is hopeless and i dont know how to work it out .I do not like or trust the idea of losing part of my shareholding .
It seems to me that we will actually be paying for the 50p dividend , by losing shares through consolidation.!!???
Yes we are getting a 10% bonus but it's for turning in at work during this pandemic if u are shielding u get nothing
If share price is 250p and dividend is 50p i.e. 20%.
Number of shares held will reduce by same percentage so if 1000 held reduced to 800 and share price remains at 250p.
They are looking to hold share price at same level on consolidation.
Hope this helps.
What is the point of paying 50p divi and then consolidating the number of shares by 20%. Just giving us back our own money. What is the tax implication?
Breaking down the questions/comments:
What is the point of paying a 50p dividend- to return cash the company does not need or can not generate a decent return on back to share holders.
Why consolidation the shares- not sure, other than to prop up the share price, i don't actually see any point but then haven't looked in to it in great detail, perhaps because because a reduction in share price doesn't sit well with passive private investors who may pay little attention to anything other than occasional review of the share price.
This is giving our own money back - correct, no different to any dividend. A companies value = assets - liabilities + estimate future earning potential. Any dividend is a cash outflow so a reduction in assets (or at the date of ex divi its an increase in liabilities until the divi is paid)
Tax implication- your dividend is taxable as normal. Normally a share consolidation/split does not have capital gains tax implications because your tax base gets reallocated across how the shares are now split. I assume this is the same. However, the value of your shares is expected to drop once it goes ex divi so i assume you will now carry forward a capital gains tax loss if you sell them. But my personal tax knowledge is limited.
I agree with your assessment but the tax situation means we are worse off and we have a smaller shareholding? There must be something I am missing here? Might as well sell now?
macaumike
You could ISA wrap them if your expected div is greater than £1000 which is your allowance. If you decide to keep them then your tax liability depends on your tax bracket. Basic-rate is 7.5%
GS has a buy rating today on TSCO btw but good luck if you decide to sell.
You shouldn't be worse off. You shouldn't be better off either. If you were to be better off then the share price would increase rapidly up until the point you are no better or worse off. If you were to be worse off the share price would go down rapidly until you are no worse off.
It does depend on your holding size though, if the dividend will be over 2k for you and its outside an ISA then yes you'd be worse off than if it was in an ISA.
Depending on whether you have used an ISA this year you can sell outside the ISA and then re-buy within the ISA if you wished.
Whether you sell or hold now really comes down to whether you think tesco is still a good investment for the future.
When companies accompany a special dividend with a share consolidation they say it's to maintain both the share price and EPS on a comparable basis. Until we know the basis of the consolidation it's hard to know what the impact will be, but it's looking like it will be in the region of 4 new shares for every 5 existing shares held. I think the tax implications for shares outside an ISA are the same as any dividend payment.
However, I do have a question:
All my TSCO shares (15,000) are in an ISA which pays out income on a monthly basis to my bank account. So it looks like if I take the £7,500 or so in cash it will effectively dilute the investments I hold within my ISA wrapper.
Presumably I will have to re-invest the special dividend within the ISA before it's paid to my bank to avoid this?
https://www.gov.uk/tax-on-dividends
Tax free dividend allowance is 2k currently.
@IAPR
I assume the dividend is paid into your isa wrapper, then you opt for it to paid into your bank account?
If so can you just stop the auto payment to your bank account?
Once it leaves the ISA wrapper if you transfer it back in it will count as a contribution towards the 20k allowance this tax year.
@ggplyr
Yes that's right. I think I will have to temporarily change my ISA settings to hold income on account instead of paying me out monthly.
Thanks for your reply.
Thanks
I have 9000 shares not in an ISA.
macaumike
So potentially your tax liability will be on the remainder £2500. For example if you are a basic rate earner then it would be approximately £185
You could also split the shares between a family member by bed and breakfasting half but of course with stamp duty and fess it wouldn't be worth it.
Mac, if you don't do a tax return currently and have no desire to do one then id sell to bring you under the 2k dividend allowance. Then rebuy once it goes ex divi (assuming you want to continue your Tesco holding, and that this doesn't put you over a cap gains tax threshold).