National Grid Share Discussion Threads

[utyinv] 28/4/2017 16:38

Pierre,

Re: Isa and PEPs,

Do you remember you could have a General PEP AND a Single Company PEP? Those were the days! :)

[pierre oreilly] 28/4/2017 13:55

not sure whether you had an isa pep etc in the early days, but then you got not only the divi but also the notional divi tax back too.im amazed isa are still existing. ive put the max in every year since they and their predessors were thought of for both me and the wife. as well as the now substantial financial advantage theres also the ease of filling in tax forms where they dont have to be mentioned.

[misanthropeterence] 28/4/2017 13:15

Well said Jeffian, I agree totally. Your final para. regarding ISA's or SIPP's resonates. BTW - I need a further rant - It's also annoying that to "Bed and ISA" shares you have to sell first and buy back thus taking a hit through dealing charges and spread losses.
AAARRGH!

[jeffian] 28/4/2017 12:55

Agree entirely, UtyINV. In clearly positioning themselves in the 'middle ground' to capture the soft Labour vote, the Tories have adopted the mantle of New Labour and all the financial chicanery that went with the Blair/Brown project. If taxes have to rise, so be it, but don't try to kid us. Osborne described the dividend tax changes as a “major and long overdue reform to simplify the taxation of dividends”. That was dishonest; it was simply a tax increase.

Agree also with m100 about simplification of the tax system. It will never happen but, if the Government do end up with a massive majority, I'd like them to set up a cross-party commission to agree a simplified tax formula - with only the rates to be set by the Government of the day in the context of their budgeted expenditure - and take the whole thing out of the political arena altogether. It wouldn't stop Governments taxing more or less but it would then be up to the ruling party of the day to say 'if you want these services, this is what it will cost you'.

As for "I would have thought that anyone with any substantial shareholding would have them in an ISA or a SIPP and thus be sheltered from any CGT or Income Tax" - I wish! I realise it depends on your definition of "substantial" but until the past couple of years the annual allowance wasn't that great and although I've been solemnly using the full allowance for years, we still have substantially more investments outside ISA's than in them.

[utyinv] 28/4/2017 11:54

Jeffian,

Partly agree re Osborne but Hammond is even worse. Can you name me one thing since taking office he has done for the benefit of middle England, promote saving, and/or to encourage entrepreneurial practice?

Don't say Increase tax free allowance on income...that was agreed before he took Office.

He tried to hit the self-employed through NI changes and tried to change the tax free limit from investments to take effect in 2018 (the later was intended to focus on those Company Execs taking part of their income from Shares etc but invariably because it was so crudely proposed it hit the prudent middle England Investor). Both of these have been, for the time being, kicked into the long grass.

So what has he done / implemented? He must have done some good in 6 months... or maybe not!

[m100] 28/4/2017 11:49

I would have thought that anyone with any substantial shareholding would have them in an ISA or a SIPP and thus be sheltered from any CGT or Income Tax implications regardless of what any particular company decides to do.

Osborne was clearly trying to close yet another loophole but all this messing about with the tax on dividends could be easily directed to exactly where I think it was intended, the self employed or those using investment vehicles paying dividends to avoid income tax.

If the change explicitly applied to "People with Significant Control" a notification requirement of UK company registration since the end of June last year, or to people or entities with more than a defined shareholding percentage of any UK company, this being to prevent one or more persons being a person of significant control and others with the actual shareholding and thus dividend entitlement benefitting from tax exemptions.

But even better would be to shred the entire UK tax code (circa 17000 pages containing approximately 10 million words at the last count) Then rewrite it from scratch and condense it to be wholly described and fully contained within one or two sides of A4 in 12 point text, all in plain understandable English using lots of whitespace.

Then legislate prevent any changes to the tax code for a defined period, 20 years minimum, preferably 50 years minimum but certainly way beyond two or three fixed term parliaments. The only alterations otherwise permitted being to index linking of allowances.

[septimus quaid] 28/4/2017 11:17

BTW bountyhunter, some good work on the header section (saves a lot of hunting around re dates)

[jeffian] 28/4/2017 11:16

Regarding the previous discussion here about the relative merits of a 'special dividend' vs. a 'return of capital', I've just read in the Telegraph Business (Questor) this morning something which had completely passed me by. Apparently that weasel Osborne, when "reforming" (i.e. increasing) dividend tax, inserted into the Finance Act 2015 a provision disallowing "special purpose share schemes" and requiring that all such payments were taxed in the same way as dividends. Gordon Brown would be proud!

[septimus quaid] 28/4/2017 11:15

National Grid are getting a right panning at the mo.

Whether it's down to this silly capital restructuring or wider political interference fears, who knows?

Lord knows how the share price will fare ex (special) div.

Still, a possible buying opportunity with my, soon to be acquired, special dividend?

[misanthropeterence] 27/4/2017 14:13

Just discovered (ok, ok a bit late perhaps)that American ordinary shareholders will be subject to their "more favourable" capital gains tax regime for the special dividend rather than income.
Chancellor scores again here in the UK.

[bountyhunter] 27/4/2017 12:01

that sounds about right - I've added it into the header with a ? until confirmed

[utyinv] 27/4/2017 11:55

Pierre,

Sorry in my previous post I said the expected final divi would be 26.8p, I meant to put 28.6p.

Interesting times ahead!

[bountyhunter] 27/4/2017 08:00

All the divi & consolidation info is in the header now (except for the final divi amount to be confirmed) so any further related Qs on the mechanics can be referred there.

[pierre oreilly] 27/4/2017 07:55

Uty, yeah, I know your post was just about the normal divi. The 2nd para in my reply was for those who didn't.I agree that high divi shares very often recover quickly from the xd drop (for nonspecial divis), mainly because the ratios on which decisions are based are improved by the price drop, in my view. So as you say, for those buying, the day they go xd is a good time usually, and in this particular case, as you also said, most will have some cash to do exactly that. (I wandered about the being played bit too)!

[utyinv] 26/4/2017 23:44

Pierre,

I guess you're being played. My post 4587 has NOTHING to do with what seems to be dominating this bb at the moment; posters getting their heads tuned into the purpose of the share consolidation.

Normally if you wait for a share dividend the price has gone back up from what it was on the Ex divi date, thus divi reinvestments don't always work as well as having the cash to buy at ex-divi date. That is something I have successfully done in the past, knowing what divi I expect to get in Aug and if I have the cash avail at the start of June, buy when it goes ex-divi and when the divi is paid in Aug just top up the cash account. Has worked in the last 9 years out of 10.

[pierre oreilly] 26/4/2017 20:49

All the answers to all the recent questions and misunderstandings are in the previous 10 or 15 posts! Pole, 1310 (held before x special divi date), 1200 respectively.

[arf dysg] 26/4/2017 20:08

It has just dawned on me that if dividends are taxed (of course they are!) then you could buy beforehand and receive the dividend, and therefore give some money to the government. On the other hand, you could buy more cheaply afterwards, get the same quantity of shares and NOT give money to the government.

Hmmm... difficult choice.

[arf dysg] 26/4/2017 20:08

Pierre, are you sure about that date of 1/6 for the price drop? What the announcement says is:

"Record date for the special dividend 19 May 2017"
"Ex-dividend date for the special dividend 22 May 2017"
"Special dividend payment date 2 June 2017"

So at close of business on Friday 19th of May, those who are holding will be eligible for the dividend.

At opening of business Monday 22nd of May, the price will be 26.8p lower than Friday's close. The _payment_ of the dividend is an entirely different date, i.e. 2nd of June.

[poleaxe] 26/4/2017 20:00

So if i wish to end up with 1200 shares after consolidation how many shares do i need to hold prior to consolidation, and when i receive the final dividend what number of shares will it be based on. Sorry but i am completely spaced out by the previous posts.

[pierre oreilly] 26/4/2017 16:55

UTY, I agree that on 1/6, the shares will drop 26.8p (if the divi is 26.8p) due to going xd. They may drop more or less than that due to other market forces. on 2/6 we'll get the special divi. So yes, we'll be able to buy ng at 26.8p cheaper than it was two days before (all other things being equal), but it will be worth 26.8p less. I agree the p/e and other numbers will be improved by the lower price, and market forces will tend to increase the lowered price a bit due to that. That's why i like high divi shares.

Of course, all that is totally different to the special divi situation, where the effects (all other things being equal) are known. Of course, all other things won't be equal, and the price could vary between say 0p and any higher limit, but it's likely to be within +- a normal day's market movement of the previous price, and none of it will be due to going x special d directly.

Velod, we are talking about the price change due to the special divi. It won't change due to that. It may and probably will change due to other factors, but it's unlikely to change by the 84p or whatever you are expecting, and if it does, it won't be due to the mechanics of the capital reorganisation.

[velod] 26/4/2017 15:45

Pierre - I'll just finish, and let matters lie until events unfold, with a well known poetic quote (Robert Burns I think) that may or may not be pertinent on this occasion:

"The best-laid plans of mice and men .... often go awry"

. . . Perhaps then you will understand my 'difficulty in understanding' a mechanical-only adjustment that is supposedly independant and free of market reaction to that adjustment.

[utyinv] 26/4/2017 15:11

Final results will be interesting in little over 3 weeks time!Also the future strategy the Company hopes to adopt moving forward.

[utyinv] 26/4/2017 15:06

Pierre,

One thing some posters have forgotten or not taken note of; The day before the special divi is paid I expect the shares to fall slightly more than the Final Divi of 26.8p+ (before anyone asks where is the final divi stated) ..... Based on maintaining earnings per share and the current divi policy, conservatively the final divi in Aug should be 28.6p+.

So we may get an opportunity to buy shares at a discount when the special divi is paid??