Aviva Share Discussion Threads

[davebowler] 18/5/2022 12:12

I think the sale of the B shares is a CGT event.

[rongetsrich] 18/5/2022 12:10

Time to move on, uncle Albert!

[uppompeii] 18/5/2022 12:02

I still would like my Divi that was cancelled tbh.

[tobyjo] 18/5/2022 11:32

marksp2011,could you advise me how this event affects the original cost price ?

[edmundshaw] 18/5/2022 11:13

Quote from the Compass group consolidation explanation:

"to the extent that a Shareholder receives cash by virtue of a sale on his or her behalf of any New
Ordinary Shares to which he or she has a fractional entitlement, the Shareholder will not, in
practice, normally be treated as making a part disposal of the Shareholder’s holding of Existing
Ordinary Shares, the proceeds instead being deducted from the base cost of the Shareholder’s
new holding. This treatment applies where the cash received is ‘small’ as compared with the
value of the shares in respect of which it is made. For this purpose, HMRC regards ‘small’ as
meaning 5 per cent. or less and additionally regard an amount of £3,000 or less as ‘small’,
regardless of whether or not it would pass the 5 per cent. test. If those proceeds were to exceed
that base cost, however, or if a Shareholder were to hold one Existing Ordinary Share at the date
on which the Share Consolidation becomes effective and so would not be entitled to any New
Ordinary Shares of 11 1
⁄20 pence, the Shareholder would be treated as disposing of part or all of
his or her holding of Existing Ordinary Shares and would be subject to tax in respect of any
chargeable gain thereby realised."

The above was my understanding from the HMRC text that I read. If your proceeds are "small" as defined in the HMRC bumf, the CGT event is not triggered. I had forgotten that detail, and should have mentioned it as it will doubtless apply to some investors.

As for the forced sale, that is exactly what a share consolidation + capital return is equivalent to. I am not about to argue semantics on that one.

[smurfy2001] 18/5/2022 11:04

Shame l don’t the capital from Aviva otherwise I’d be adding. Oh well.

[marksp2011] 18/5/2022 11:00

You didn't "sell" anything
It is a capital restructuring the company split your holding

Every Source share @423 became a New Share (76/100 of an old share) @ 423 and a B share @101.
the B shares were then redeemed at face by the Company.

This doesn't trigger a CGT event

[edmundshaw] 18/5/2022 10:48

For CGT purposes I am calculating the price of "forced sale" of my shares at £4.287083 (let's say the FSP).

If you have a number of shares divisible by 25 the calculation seems very simple, you sold 24/100 of your shares at that FSP, just offset by the usual CGT rules. So if you are not trading just need to find your section 104 price. Of course if you bought some at the knockdown price on Monday (or subsequently within a month) then I guess the same day trading or bed and breakfast rules kick in as appropriate, but nothing different to the usual number-crunching.

Happy to be corrected if that seems wrong to anyone.

[scemer] 18/5/2022 10:45

Typo56 surely if everyone did buy the shares would rise significantly

[typo56] 18/5/2022 09:53

metis20, I think you need to distinguish between the consolidation and the capital return.

The company have returned 101.69p per original share, equivalent to 24% of your holding at a share price of 423.7p.

If you wish you can reinvest that money, thereby increasing your percentage stake in the company, in much the same way as you could reinvest dividend income. Doing so will give you a larger stake in the overall dividend distribution. (Clearly not everyone can do this as there wouldn't be enough shares to go around!).

The point is, you could do this with or without the consolidation and the result would be the same. The reason for the consolidation is simply to maintain a similar share price and not spook the market. Arguably this is more trouble than it's worth, because new consolidated shares have to be issued, SEDOL/ISIN numbers change etc which confuses brokers and means in some cases people are unable to sell their holdings for a couple of days.

[prokartace] 18/5/2022 09:42

Shouldn't the share price rise as with the share consolidation the future EPS must jump by 25%

Also the comment about the possibility of investors buying back the shares they lost will also have a positive effect on the share price
In fact I am going to buy back today before the investors receive the payment for the consolidation in the next couple of days

[metis20] 18/5/2022 09:36

Typo56

I agree one reason for the consolidation was probably to maintain the share price However IF you use the cash from the compulsory purchase of B shares to increase you share holding back to what it was before the consolidation, then your dividend income will be about 30% more than had there been no consolidation and you had not bought more shares.

[coxsmn] 18/5/2022 09:27

Positive update.A no brainer here with solid earnings and dividend.

[demi] 18/5/2022 09:12

Cassini Thank you for your message an for taking the time to explain. Its appreciated.

[mo123] 18/5/2022 08:57

Jefferies said the results showed there was "promising growth in pockets of the business", reiterating their "hold" rating on the stock.

Wow, so much enthusiasm.

Even more surprised by Barc who have a 620 target but only put an EW rating on the stock.

[adobbing] 18/5/2022 08:51

Not following this very closely, so apologies if I’m asking a repetitive question.

I have a small quantity (637) of these as a paper certificate from CGNU.

Would I be correct in thinking as the registered holder, I will receive;

A new paper certificate for the reduced shareholding and a cash payment direct to the bank account into which the dividends are currently paid?

If so what is the cash payment per old (CNGU) share and how many new shares is it per old share please?

[typo56] 18/5/2022 08:26

The reason for the consolidation was to maintain much the same share price when going ex-capital return. It was not to increase your dividend income.

The total amount of dividend the company pays out is independent of the number of shares in issue.

Your percentage stake in the company isn't affected by the consolidation.

It therefore follows that the total dividend you receive isn't affected by the consolidation.

[beermat1] 18/5/2022 08:10

Purple, probably irrelevant unless you’re a large holder but this is of course a chargeable event for capital gains tax purposes.

[typo56] 18/5/2022 08:08

If the company is sitting on excess cash it can return to shareholders as dividend or as capital. Both could be regarded as 'forcibly' returned, just the tax treatment is different.

[metis20] 18/5/2022 08:01

uppompeii - the benefit of the consolidation followed by compulsory purchase of B shares is to increase your dividend income by about 30% (as compared with what it would have been if there had been no share consolidation). The 30% increase assumes you use the cash from the compulsory purchase of B shares to increase you share holding back to what it was before the consolidation. This consolidation is good news for those seeking regular dividend payouts, rather than lumpy payouts associated with special divis.

[1robbob] 18/5/2022 07:52

cjac
Appreciate your views on todays numbers?

[1robbob] 18/5/2022 07:36

Q1 Update
A very subtle nudging downwards of the Dividend 'guidance' for 2022 and 2023
31.0p(31.5p) and 32.5p(33.0p)

[purplepelmets] 18/5/2022 07:22

Thanks Skinny, appreciate the concise answer

[mj19] 18/5/2022 07:10

Aviva, an insurance company, said U.K. and Ireland life sales were up 2% on year to 8.4 billion pounds and life value of new business rose 31% to 144 million pounds. Meanwhile, general Insurance gross written premiums increased 5% to 2.1 billion pounds.

[cwa1] 18/5/2022 07:07

Satisfactory update IMO. Reasonably happy to have topped up on the Monday "wobble" now. Fingers crossed going forward...