Aviva Share Discussion Threads

[scrwal] 31/3/2021 18:20

From what I have read you don't necessarily need to complete a W-8BEN for a SIPP.

Whether or not you only pay 15% tax when the form is completed seems to depend on which broker you use , as does the ability to trade in such stocks.

The form lasts for 3 calendar years after the year it is completed.

[whatsup32] 31/3/2021 17:44

CASSINI.
If you haven’t filled a W-8BEN you will be taxed at source on your dividend incomes , I think it was 25% .

W-8BEN will request a UTR number (tax number) to verify so that there isn’t double taxation .

I should have added my account is normal trading acc. Not SIPP

[cassini] 31/3/2021 17:36

scrwal31 Mar '21 - 12:24 - 7992 of 7994

Thanks for the detail on that one. Personally, since I have a SIPP and an ISA I put all my foreign shares into the SIPP. I never knowingly filled out a W-8BEN when I opened the SIPP. I answered some online questions on my broker ii's website of course but if there was a W-8BEN in there it was all very seamless.

Interactive Investor seems very good on dealing with Withholding tax etc with the minimum fuss.

[geckotheglorious] 31/3/2021 17:24

Deliveroo workers are part timers aren't they?

What is paying them properly exactly?
All they do is deliver food.

30% fall on IPO day hardly a surprise given several well known fund managers said they'd not get involved. Wonder if they bought on the dip!

[ianood] 31/3/2021 17:17

L&G took the same decision on Deliveroo I'm glad to say!

[scrwal] 31/3/2021 12:24

Cassini
Re post 7984 withholding tax from US holdings is only reduced to 15% if a W-8BEN is in force for an ISA and normal account.
It doesn't seem to be necessary for a SIPP - this is per the DGOC board postings.

[dr biotech] 31/3/2021 11:14

Wouldn't touch deliveroo. I think they won't be as busy once covid lockdowns pass, and they could struggle if forced to pay their workers properly. I was pleased that AV and SLA said they wouldn't take part. Too often institutional shareholders turn a blind eye to poor coorporate governance and other issues ie exec pay.

[whatsup32] 31/3/2021 10:19

Aviva management deciding not to take part in Deliveroo float due to regulatory and corporate governance may have been a wise decision.
Tumbled 30% at open

[yf23_1] 31/3/2021 09:46

I'm very confused here.
When is a dividend not a dividend based on profits ?
Is it just nomenclature ?
Is it still called a dividend even if its a return of capital.
There must be other ways of adding to distributable reserves other than via the profit/loss account.

[1robbob] 31/3/2021 09:28

Cassini and others

It may be true to say that Dividends are free of Income Tax at the Basic Rate they are however far from Tax Free to Basic Rate taxpayers

Prior to 1997 Companies in effect paid Corporation Tax on its profits AFTER the deduction of dividends. They deducted Basic Rate Income Tax from all dividends at source for HMRC. Investors not liable to Basic Rate Income Tax then reclaimed any excess tax paid from HMRC.

Following Gordon Brown’s infamous £100bn ‘tax grab’ on Pension Funds in 1997; Companies no longer deducted Basic Rate Income Tax, thus leading to the illusion that dividends were tax free.
The ‘sting in the tale’ was that Corporation Tax was to be payable on Profits BEFORE dividend payments.

So although you are not liable for Basic Rate Income Tax on your dividend, the Company will have paid 19% Corporation Tax on that dividend. That tax can’t be reclaimed, so tax free Investors will have suffered 19% Tax on their dividends whether they like it or not.

For every £100 of dividends received by shareholders, un-reclaimable tax of £23+ will have been paid by the Company.

I am certainly no Tax expert, especially on ‘Special Dividends’ but could it be that if AV distributes £4bn as a Special Dividend that they will have to pay additional Corporation Tax of £1.23bn? rest assured that HMRC will want to have it’s ‘pound of flesh’?

[ianood] 31/3/2021 07:44

I think 1robbob was referring to the now defunct Advance Corporation Tax:
"Advance Corporation Tax (ACT) is the prepayment of corporate taxes by companies in the United Kingdom that distributed dividend payments to shareholders. The tax, which was introduced in 1973, was abolished in 1999 by then Prime Minister Gordon Brown"

[wadders5] 31/3/2021 07:05

Don't forget about the 38.1% rate.

[woodhawk] 30/3/2021 23:08

You are quite right about tax on Shares ISAs and SIPPs, there is no tax whatsoever on capital gains and dividends - furthermore, you don't even have to declare profits/divis in either on your tax return.

This is unlike regular shareholdings, where you need to declare cap gains in excess of £12,300 or if you have sold shares worth more than 4 times your personal allowance within the tax year (£49,200.00 this year), irrespective of the actual gain.

[cassini] 30/3/2021 23:03

1robbob30 Mar '21 - 15:39 - 7960 of 7982

You say that dividends are taxed within an ISA at the basic rate - they are not, as far as I am aware. I'm not sure if you are referring to special dividends only or ordinary dividends - you mention special dividends at first in your post then 'all dividends'.

Dividends paid into an ISA are tax free. In addition there is a £2000 personal dividend allowance (separate from the personal CGT allowance) that exists which is not affected by any dividends accrued in an ISA. So, outside of an ISA, someone can take up to £2000 in dividends tax free, then they pay 7.5% on further dividends (if a basic rate tax payer) or 32.5% if a higher rate taxpayer.

I understand Withholding tax on dividends from foreign companies is reduced from 30% to 15% if within an ISA.

In a SIPP, dividends are also paid in tax free. However, any money withdrawn from a SIPP is subject to standard income tax at the appropriate rate, except 25% of any sum withdrawn will be exempt from income tax. Withholding tax on foreign company dividends should be zero in a SIPP.

If anyone knows any better I stand to be corrected.

[1robbob] 30/3/2021 22:52

cjac39
I have always felt that the management style at AV was still that of a 'comfortable' Mutual and there was a lot to be gained by sharpening up the operation, regardless of any improvement in the general market conditions
Have you heared anything on the grapevine as to how AB has been effecting the day-to-day operations?

[cjac39] 30/3/2021 22:35

sorry klotzak. i missed your posts. i will reevaluate accordingly on the additional insightful analysis you provided for which thankyou.

[cjac39] 30/3/2021 21:55

Hi 1rob

I have to say I’ve been trying to work out what to do here. I first bought some at 420 pre cv expecting them to accrete nearer 5. CV hit and thankfully gave me opportunity to trade in all the way down. It’s now at current share price my largest single holding and I don’t quite know what to do.

Of course one could enjoy the yield and downside looks minimal vs book value especially as that’s partially in cash.

But I do wonder whether I can see better value elsewhere especially in p&c both U.K. and US with commercial rate cycle turning.

AV has an incredible franchise but the back book annuities and heritage will lower roes as will de leveraging.

So it’s really can they find stuff to do away from life that maintains roes and commands a premium to book.

I’m not so sure sadly and with gains and bv increases closer to fair value I’m looking to unwind this year poss before the great buyback / special debate

[klotzak] 30/3/2021 21:52

Share buybacks, special divi and a recovering market.. on sentiment I think by the summer we'll see 430+, that's sentiment and nothing to do with fundamental and what happens to growth.

[klotzak] 30/3/2021 21:48

7943 onwardscjac39, pleases tell me the value in those posts. Two posters.Let's not cherry pick, there's money to be made, without snide remarks to anyone.For someone to be on here at this time, the most exciting time in my 18 months holding, then they've come to find out information and share there's.I offered Whatsup a friendly line of my ideas on taxation...and his vitriolic response is belo to see.

[1robbob] 30/3/2021 21:33

cjac39
Perhaps for the first time in years the 'stars are aligned' for AV,?

[cjac39] 30/3/2021 21:33

7975 and 7976

Klozak

Please explain what added value they provide to this thread. Entirely unrelated ad hominem negative comments.

The problem with this is not personal to you or anyone else; just it makes this thread more tiresome and eventually people will leave.

We’ve lost a few but thankfully I’m still in touch with wba. I’m sure others will drift away with more tediousness like this.

[klotzak] 30/3/2021 21:10

Jen, not you. I was quoting the nonsense Whatty had posted.He's a deflector, and whilst he floats about one person that has filtered me, I think we need to refrain from challenging her. I'm here to make money and share what I find out. I'd like to think that's team play, whatty seems to be here to shuffle around in her nest and start fights with those that don't accept her unsubstantiated claims.

[klotzak] 30/3/2021 21:05

Whatsup, so you resort to poor comms? I'll raise your issue to one of poor inter-personal skills!Good day.

[cjac39] 30/3/2021 20:11

I’m not going to add anything to the extensive coverage this has attracted.

What is however less discussed is the potential turn in the rate cycle. I’ve been sceptical it was an actual inflexion point rather than a bump in the road. However it does look more like there is something here.

Rising rates for insurers of course have all sorts of benefits. From the p&c side it elevates the return potential from the float and reduces longer reserves.

From the life side it’s even more prolific given longer liability profile. Higher yields equals more retail annuities as pricing improves. Similarly it equals more buyouts as deficits improve. Under s2 it equals lower risk margin (which hopefully is on the way out) which temporarily is offset by lower tmtp but overtime it reduces drag of tmtp unwind.

So overall accretive I would argue

[whatsup32] 30/3/2021 19:44

kenmitch,

Strange you’re welcoming comments with opposing views in a non aggressive way and without personal attacks . Yet if you read back on your posts you’ll find you were the one that was aggressive with personal attacks.

As for klotz comments, not surprised you’re confused with his comments , think we all are