Henderson Far East Income Share Discussion Threads

[pvb] 05/11/2022 11:33

Superiorshares 5 Nov '22 - 04:31 - 1227 of 1230

Pvb
Your correct. All gains inside a Isa are Tax free.
My point on these proposed Tax increases on dividends .

And my point is, whether inside or outside an ISA, for ~25 years there have been no taxes taken from UK dividends on ordinary UK shares before payment. That's just how it is and has been for about a quarter of a century (though an unbelievable number of people spent decades denying this simple fact - that I don't deny!).

There are no 'witholding taxes' on UK dividends.

Personal "dividend taxes" are taxes you owe/pay on received dividends - after payment - in line with whatever the current tax regulations say. If received in a tax free/privileged environment, e.g. an ISA, these taxes are not charged, due, or paid.

Of course, the government can change future legislation however it wants. But the above is the current general dividend taxation situation, as it has been so far for ~25 years.

Eg the Government introduces a 5 per cent Tax on dividends .
Are you telling me the Government will chase that 5 per cent Tax of each In dividual recipient ?

Currently - outside an ISA - there is the personal dividend tax allowance (£2000). You only need to pay dividend taxes on amounts above that.

N.B. The existing dividend tax rate is 8.75% for BR taxpayers, 33.75% for HR taxpayers.

[superiorshares] 05/11/2022 11:13

wllmherk.

I think people are missing my point .

for those that own shares in Hfel and its in your ISA. you dont actually own a portion of HFEL. you own a piece of paper known as a share.

its not a share of the company . The share should rise or fall with company fortunes or market expectations .

shareholders in companies that go bust ( ive had a couple of those } realise that you actually own zero of the company .

let me try BP as an example to make my point .

example The government says it will put a 10 per cent tax on dividends. bp is yielding 10 per cent and they announce that dividend will be paid.
So the government taxes BP directly 10 per cent of the total dividend payment .

in effect it would reduce the dividend shareholders receive . it wouldnt even get to
ISA, it would be taxed at source .

[wllmherk] 05/11/2022 10:42

I think it would be highly unlikely and very unpopular if they tax investments held within ISA's, someone once said a desperate Government is a dangerous Government so one never knows, but, I'd bet heavily the Government will leave ISA's alone, but, investments outwith is low hanging fruit. We will see in a couple of weeks.

wllm :)

[superiorshares] 05/11/2022 04:37

Pvb
And I been right on just about everything I've posted on Advfn .

So hypothetically HFE.l is going to pay £1 million In dividend. The government says we are going to introduce a 5 per cent Tax on that .
So does the Government take £50,000 direct from Hfel or allow that dividend to be payed into individual peoples Isa accounts and then try to claim the 5 per cent. And say " oh cripes we can't have that Tax because all gains in an Isa wrapper are Tax free ""
Really?

[superiorshares] 05/11/2022 04:31

Pvb
Your correct. All gains inside a Isa are Tax free.
My point on these proposed Tax increases on dividends .
Eg the Government introduces a 5 per cent Tax on dividends .
Are you telling me the Government will chase that 5 per cent Tax of each In dividual recipient ?

[pvb] 04/11/2022 22:38

Superiorshares 4 Nov '22 - 21:31 - 1223 of 1225

Goldpig
I have seen the reports of rumoured Tax increases on dividends . I read the headline and didn't bother to read any further.
You say that ISA held will not pay the tax ?
I thought these taxes were done at the point of payment. Ie the company pays the dividend and the Tax man takes their portion directly out of the dividend.
So the Tax in effect would be taken before the money even reaches your ISA .
Am I wrong here ?

Yep. You've been wrong for about 25 years.

[panshanger1] 04/11/2022 22:30

Don't think they will do that SS would be considered as very regressive Keep your div payers in an ISA or Sipp and keep you growth/ ab return stuff outside

[wllmherk] 04/11/2022 21:51

Your wrong SS, my ISA holdings are not taxed, hence my portfolio holdings outside our ISA's will be sold down in the coming years and moved inside the tax wrapper. I think the dividend allowance will be axed altogether, the Government is desperate to make savings and increase revenues and they are unlikely to get much flack for what will be portrayed as taxing the rich.

wllm :)

[superiorshares] 04/11/2022 21:31

Goldpig
I have seen the reports of rumoured Tax increases on dividends . I read the headline and didn't bother to read any further.
You say that ISA held will not pay the tax ?
I thought these taxes were done at the point of payment. Ie the company pays the dividend and the Tax man takes their portion directly out of the dividend.
So the Tax in effect would be taken before the money even reaches your ISA .
Am I wrong here ?

[melton john] 04/11/2022 15:23

Thanks for the reply Goldpig, good that isas will not be affected. I remember Gordon Brown taxing pension fund dividend income. Has that changed, you say they are tax free. I was just listening to George Harrison of the Beatles on some radio programme the other day singing "Taxman". "1 for you 19 for me", I remember those days of talent leaving the UK because of high taxes at 95p in the pound. I also remember so many takeovers of UK companies as a result of low valuations because UK savers are discouraged from investing in shares as a long term store of capital. Better to inflate house prices so younger generations can't afford them. Have a good weekend.

[goldpiguk] 04/11/2022 11:35

Hi Melton,

Your comments about dividend tax rates are from the heart.

Given that dividends will remain tax-free in both pension funds and ISA's the impact of a dividend tax increase on financial markets will be minimal.

The pensions industry had c.£2.2 trillion invested at the end of 2019 and the most recent figure I can find for stocks and shares ISA's is c.£584 billion at the end of 2018/9 tax year.

Higher taxes on dividend income and reduction or abolition of the £2,000 dividend tax-free allowance seem certain in the November 'budget', after the mess Liz Truss made.

You are watching an old political game. Labour wants dividends to be taxed at the same rates as income tax. The Tories are thinking about an additional 1.25% increase on top of the 1.25% already announced by Jeremy Hunt meaning a 10% dividend tax for basic rate taxpayers. Which would most investors prefer?


Under a higher dividend tax regime, HFEL may not be as appealing outside a SIPP or ISA. After the 'budget' I will certainly be reviewing my investments to make them even more tax efficient. (My HFEL shares are all held within my ISA.)

Goldpig

[scruff1] 04/11/2022 10:31

Chancellor was a disaster as Health minister. Looking on track for a repeat at the Treasury. He is a Tory isnt he?

[melton john] 04/11/2022 08:05

Let's hope the chancellor keeps his sticky fingers off them divis. If holders of divi payers are taxed more, why hold them, price goes down, foreign companies take them over, charge the company for whatever to make sure no profit in UK. Chancellor shot himself in the foot.

[mister md] 04/11/2022 07:44

Happy to collect all these 7%,8%,9% dividends in various shares - long may it continue. With everyone in growth stocks the shift to value stocks has only just started imho.

[carpingtris] 04/11/2022 07:38

HSI was up well too so hopefully HFEL has a good day.

[panshanger1] 04/11/2022 07:35

Yes dividend looks safe for now

[carpingtris] 04/11/2022 07:31

'After paying the dividend, we will once again be adding a moderate amount to the revenue reserve, which we use to smooth the dividend when market conditions are severe.'

That's a good positive :)

[unastubbs] 04/11/2022 07:28

TQ skinny, missed that

[superiorshares] 01/11/2022 04:38

You have a process going on at the moment.
The ultra Woke US trying to hold onto its
Number one status .
This will affect all of Asia's economy .
At the end of the day there will be one winner and it ain't the US .
Wait for a further collapse and then invest with a 15 year view.
My own opinion.... which will be correct .

[tim 3] 29/10/2022 15:38

Thanks Kiwi.

[kenmitch] 29/10/2022 12:36

And Mail on Line has this extraordinary article on the real reasons for those China covid lockdowns! You’ll be gripped from the start and the forced rounding up of everyone on an IKEA store! Frightening.

[kiwi2007] 29/10/2022 11:22

tim 3 - Too much exposure to China...

Today's FT has a good article which goes some way to explaining it..



'If you didn't pull out of China in 2021 at the latest, you were not paying attention.'