Re: Tosco Shares - Buy or Sell?

[Wirey2020]

Shares will be tied in if they are the reinvested dividend of shares already in SIP. you can sell and pay the tax or you can save them for 3 years and not pay any tax on them so the “tied down” options only serves to benefit you if you opt to go with it.

[lordadmiral]

Reinvesting dividend is a good move but for people who know they will stay at Tesco for next 3 years. Think wisely. If someone receive huge dividend, like 5k and reinvest it but for ex. quit 2 years later then all that money is lost.

[Millie]

Shares will be tied in if they are the reinvested dividend of shares already in SIP. you can sell and pay the tax or you can save them for 3 years and not pay any tax on them so the “tied down” options only serves to benefit you if you opt to go with it.

What about reinvested  dividends
on ordinary shares ?  Are they also tied in ?

[Fun girl]

No you can sell them when you want

[Rad]

Reinvesting dividend is a good move but for people who know they will stay at Tesco for next 3 years. Think wisely. If someone receive huge dividend, like 5k and reinvest it but for ex. quit 2 years later then all that money is lost.

If you own the shares either by buying or from dividends, you dont lose them if you leave tesco.

[owlnight]

Rad, i think lordamiral means not keeping the reinvested shares  for 3yrs, if they are sip shares, (free) and then you have to pay tax  if like he says you decide to leave after 2yrs.

[Charlie Harper]

Oops

No you haven't.

Example...We'll use a share price of £2.42

You own 190 shares say, you decide to sell at £2.42 per share...the value/sale is £459.80.

Or...you hold the shares...

You get the Special Divi of 50p per share = £95

Your share holding is then reduced from 190 to 150 shares after consolidation.

150 shares at £2.42 =£363

New share value of £363 + your Divi payout of £95 = £458

[Charlie Harper]

Share price WILL go up or should?

It’s an educated conclusion, the share price will go up as a result...it will sharply go up to around £3.10 then overtime supply and demand principles (save for any outside interference that may affect the market) will mean that the price will climb steadily.

Doubt it...The company has basically been devalued by 7.5 Billion.

[BUY TESLA STOCK]

 

[Welshie]

I dont really understand any of this so can someone explain how it affects save as you earn .
I still buy my shares at the option price but will the share price drop and when is this expected to happen?

[bushido]

Oops

No you haven't.

Example...We'll use a share price of £2.42

You own 190 shares say, you decide to sell at £2.42 per share...the value/sale is £459.80.

Or...you hold the shares...

You get the Special Divi of 50p per share = £95

Your share holding is then reduced from 190 to 150 shares after consolidation.

150 shares at £2.42 =£363

New share value of £363 + your Divi payout of £95 = £458

Aren’t we taxed on the dividends though? Who’s covering that cost?

[Minnie Mouse]

You pay no tax on dividend under £2000 but will have to pay tax on anything over £2000 that’s for the whole years tax allowance on dividend

[bushido]

So those of us who kept all or some of the shares back from the date will be penalised.

[Millie]

You pay no tax on dividend under £2000 but will have to pay tax on anything over £2000 that’s for the whole years tax allowance on dividend

Is that tax also paid if we take shares rather than cash ?

[Minnie Mouse]

I was on the government website trying to find that out will post if I find out

[Fair play]

So those of us who kept all or some of the shares back from the date will be penalised.

You will only pay tax on dividends if you declare it  🤗

[bushido]

So I have to lie to inland revenue if I don’t want to lose any money. What a position for the company to put us in.

[NightAndDay]

You get £2,000 tax free from dividend payments, anything above is taxed at 7.5% for basic rate tax payers, and I believe 32.5% for HR and 38% for additional rate tax payers, that's why I keep my dividend earnings at just under the threshold, don't want to be paying 38% on my dividend earnings when i'm already single handedly funding the cushion for the ramifications of Brexit through my income tax contributions of 45%.

Selling shares is different as that falls under Capital Gains Tax.

[Millie]

You get £2,000 tax free from dividend payments, anything above is taxed at 7.5% for basic rate tax payers, and I believe 32.5% for HR and 38% for additional rate tax payers, that's why I keep my dividend earnings at just under the threshold, don't want to be paying 38% on my dividend earnings when i'm already single handedly funding the cushion for the ramifications of Brexit through my income tax contributions of 45%.

Selling shares is different as that falls under Capital Gains Tax.

So would it be better to take the dividend as shares as they can then be sold whenever you wish to sell and the capital gains tax is more generous ?

[NightAndDay]

That would be down to how Tesco performs as a business and the confidence shareholders and business analysts have in the company, with the new CEOs profile and strategy being similar to Dave Lewis's and the expansion of the German Discounters, it's unlikely that the share price will go up in the long term unless the new CEO makes some innovative investment decisions, I would take the dividend payment and accept the loss in shares.

The further streamlining of the business also shouts short term gain long term losses.

Saying this though, Tesco being the size it is, even with worsening year on year performance, the dividend payment variance is quite stable, it'd be better to hold shares for the dividends in big companies and sell shares for profit in smaller more volatile companies and let earnings from that fall under CGT.

[Minnie Mouse]

On shareview website it states if you take shares instead of cash dividend it is treated the same so you will have to declare if over £2000

[NightAndDay]

Yes, doing it via DRIP gives you the cash as payment then automatically uses it on shares, it's just a quicker way to do it than buying the shares yourself when you get the cash. In essence, you're using your cash to buy shares in both instances.

[notsofunny]

You get £2,000 tax free from dividend payments, anything above is taxed at 7.5% for basic rate tax payers, and I believe 32.5% for HR and 38% for additional rate tax payers, that's why I keep my dividend earnings at just under the threshold, don't want to be paying 38% on my dividend earnings when i'm already single handedly funding the cushion for the ramifications of Brexit through my income tax contributions of 45%.

Selling shares is different as that falls under Capital Gains Tax.

So you work for Tesco and earn  at least  £150 ,000 ,, am i correct in thinking that ?

[NightAndDay]

Not directly, I hold a government position with the NAO where I come up with accounting rules and frameworks and ensure that all retailers comply with strict accounting and auditing standards in their reporting, making sure that from a financial and accounting standpoint, all are acting legally and ethically. Auditors such as Deloitte and PWC have to report to the NAO.

[Millie]

Not directly, I hold a government position with the NAO where I come up with accounting rules and frameworks and ensure that all retailers comply with strict accounting and auditing standards in their reporting, making sure that from a financial standpoint, all are acting legally and ethically. Auditors such as Deloitte and PWC have to report to the NAO.

So will you be taking shares or cash ?  As I’m finding all this very complicated.