Gsk Share Discussion Threads

[racg] 13/7/2015 13:48

Pay where is the qualitive difference between owning a trading business personally and having shares in a listed trading business?

None I would say.

It's double taxation pure and simple.

If he busted wanted to catch contractors with personal service companies he could of tightened irc35. It is a tax grab pure and simple. Do not try and say its for for business but not fair for listed investments. It is unfair to both.

[anhar] 13/7/2015 13:27

It appears that the budget changes were intended principally as an attack on those owner-managed companies because of their widespread use of dividends instead of salary to avoid tax.

But the result of the changes is also to increase tax on those investors with substantial dividend income from shares in quoted companies. Investing in quoted shares for dividend income has nothing in common with the sort of dividends drawn from personal companies for tax avoidance but the same rules apply.

With the existing system, it was something of an anomaly that dividend tax was a lot lower than the tax on other income such as wages or interest received. Even with the new rules, dividends will still be taxed at less than normal tax levels.

In an ISA, the same rules continue of no income or capital gains tax. For shareholdings of any size, it's probably still worth having an ISA provided it is a low fee one. Even if there is no immediate benefit, you never know in future if you may fall into a higher tax bracket or have a big gain and then you can't use the ISA limits for previous years.

[racg] 13/7/2015 12:19

No its not, it is improving the benefits of owning an isa. I ve got dividends outside isa s and pensions and that is really annoying me.Unless you are upset those with very small dividends are getting a pitiful £5k allowance. You get that allowance too, you know. People with close companies across the nation have been mugged by Gideon.

[dr biotech] 13/7/2015 11:39

This could be relevant to a few on here. My dividend income is about 4-5k a year but all in ISAs - its reducing the benefit of owning an ISA for the averagely well off.

[jadeticl3] 12/7/2015 21:55

Scottishfield,

Thanks for your contribution! I sometimes forget what I was about to say!!!

[greenpastures2] 11/7/2015 12:51

Companies should only pay a dividend if they have not got a better use for the money. The new budget rules on dividend taxes will align the UK with the US. There companies tend to pay dividends sparingly because of double taxation. It is a major reason why buy backs are used more often in the US than the UK.

[hpcg] 09/7/2015 16:14

Earnings yield is more important than distribution yield in any case.

[dr biotech] 08/7/2015 17:00

I think its a good thing sometimes. Aviva used to have a high yield and everytime the results came around the focus was solely on the dividend - this lead to a lot of speculation and column inches and I think it took the focus off the results. They cut it to a more sustainable level and the share price has performed strongly.

I'm not saying that it would be the same with GSK, but if its becomes close to unsustainable cut it.

[essentialinvestor] 08/7/2015 16:54

Appreciate that perspective and many are in a similar position,
GSK will want to buy out the remaining Novartis OTC stake imv
and that will require a big investment.

I can see the longer term potential here, not currently holding.

[anhar] 08/7/2015 16:26

I'd certainly view it as negative if they "rebase", a sleazy euphemism for cut, because I only invest in shares for income. In line with my strat, I wouldn't sell unless such a cut drops the yield to the FTSE but I certainly would not be pleased about it because it would hit my income.

Cuts are the risk I take for investing in shares for income but I see nothing positive about them at all. I don't believe in trading lower divis for growth for two reasons. First, I don't care about share prices and second even if I did, I have no faith that cutting the divi would produce a measurable trade off in share price growth.

The difference between GSK and those others you mention is that I don't think that TSCO etc made a similar commitment to a certain divi figure for a three year period as GSK has done. So I'd guess it is much more likely than not that GSK will stick to their plan. In any event there's little point in speculating about it for me, because it doesn't influence my reasons for holding or selling the share.

[essentialinvestor] 08/7/2015 12:57

Rebasing of the dividend in 2016 IMV, as per TSCO, CNA, SBRY... it's a long list.

Just to add I would not view it as a negative development if in the context of an
enhanced growth orientated strategy, this is speculation on my part.

[anhar] 08/7/2015 12:07

I've got no interest in brokers' views. No divis are guaranteed but I'm inclined to believe the GSK 80p three year commitment plus the 20p special for the first year. That makes a yield of about 5.9% at 1,347p even without the special, which is a big premium over the FTSE.

Whatever happens though I'll stick to my income strat and hold GSK until its yield falls to the FTSE or forever, whichever comes first. Even my own beliefs about the GSK commitment are irrelevant to the strat.

[essentialinvestor] 08/7/2015 10:21

The Liberum take on GSK is interesting.

The central theme is that the status quo cannot be maintained, the dividend
commitment over 3 years may lack credibility given the number of times GSK
has not delivered on targets.

They appear to see a dividend cut as part of a new strategic plan giving GSK more
flexibility to acquire, for example, the remainder of Novartis's stake in
the OTC business and further invest in their franchises to drive growth.

[tradermichael] 08/7/2015 08:01

Let's face it, the European experiment has failed - political, economic and social

[darias] 06/7/2015 06:47

I think you are wrong Monty. If Greece leaves the Euro the Germans and, to a lesser extent, the French will pay for the exit. The Euro requires a quasi national constitution in order to work not the petty national squabbling that is the current make up of the EU. The ECB has to take control, not the politicians. That means printing money and handing that money to the Greeks, Irish, Portugese, Spanish and Italians. In other words regional development in an international situation.

[montyhedge] 06/7/2015 06:09

The non tax payer Greeks are in for a shock. How stupid are they.

[racg] 05/7/2015 20:48

Seems Greeks are going to get away with it.

[tompion] 05/7/2015 20:25

What price tomorrow?

[tim 3] 03/7/2015 21:34

Huge multi year support in this area.



free stock charts from uk.advfn.com

[racg] 03/7/2015 21:24

Agreed. Give us the methadone breezers, Witty!

[jadeticl3] 03/7/2015 20:54

Essential, GSK should supply PI shareholders with their products for free, especially those tablets which treat nervous disorders as the problem has probably been caused by the company!