What are Dividends?
Dividends are income payable to shareholders from Companies that are making profits and decide to pay a dividend back to its shareholders.
Dividends are optional and not guaranteed, usually paid half-yearly, known as 'Interim' and 'Final' Dividends.
They can be declared as either Cash or Scrip Dividends.
A Scrip Dividend is an allotment of more shares in the Company using cash.
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What are Corporate Actions ?
Corporate Actions are defined as events bringing material change to the basis of a share. Basically this means the way the share is set-up is changing.
You can find out more about the different types of Corporate Actions here.
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How will I know when there has been a corporate action affecting my stocks?
We will shortly start publishing current Corporate Actions and an archive of completed Corporate Actions.
From these pages you will be able to see if a share you hold has announced a recent Corporate Action or has changed.
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What types of Dividends are there?
There are two types of Dividend
- Final Dividend: The Dividend paid by a Company at the end of its financial year. These are not guaranteed.
- Interim Dividend: The Dividend paid by a Company halfway through its financial year. These are not guaranteed.
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How will a Dividend be paid?
If you hold the shares at home in the form of a paper Certificate you will receive a cheque through the post and a Tax Voucher for your records and declaration as Income on your Tax return.
If you hold the shares with us you will automatically be credited the cash by the Registrar direct to your account here with us.
A Tax Voucher will be posted to you to confirm the receipt and so that you can declare the Income on your Tax return annually.
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Who's entitled to receive a dividend?
To be entitled to receive the dividend, you must be a shareholder as at the close of business the day before the 'Ex-Date'.
The Ex-Date for dividends is usually set two working days before the Record Date.
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Can I change my mind after I have advised you what I wish to do for a Corporate Action?
If you accept an offer we may be able to stop the action if it has not been actioned by us. If it has been actioned you will be unable to withdraw your acceptance.
(Except in the case of takeovers where, if certain conditions are met during the takeover timetable, withdrawal can be possible).
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What is an 'Ex-Date'?
The full name for an 'Ex-Date' is the 'Effective Date'. Corporate Actions, excepting Takeovers, have an 'Ex-Date'.
This is announced by the Stock Exchange setting the date for entitlements (i.e. ensuring you take part) to a Corporate Action. The owner of a share on the 'Ex Date' is the person entitled to the offer.
Buying the stock on this date or after means you are not entitled and if you sell on or before this date, you do not retain the entitlement to the offer.
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What happens if I would receive part of a share ?
If your holding under the Corporate Actions does not split exactly into whole shares you will be left with a portion of the new ordinary share.
As you cannot hold fractions of shares, the company will aggregate your portions with other shareholders and sell as a block.
The proceeds from the sale is then split between the shareholders in proportion to your fractions.
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Do you issue Consolidated Tax Certificates ?
At present we do not offer Consolidated Tax Certificates annually.
We issue and send to you currently any Tax vouchers issued for dividends on stock you hold with us.
We are planning to have by the end of the 2006/7 tax year an annual Consolidated Tax Certificate online.
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Can you arrange Dividend Reinvestment Plans (DRIP) for shares I hold with you?
DRIP facilities are at the discretion of the Registrar of the company.
If a DRIP is available for your share in a company we will be happy to arrange this for you - we do not charge for this service but it will be subject to stamp duty and the plan administrator charge of usually 0.5%.
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Do you contact me if there is a Scrip Dividend?
We use our endeavours to contact you whenever there is a Corporate Actions you need to decide a view on.
It is usually up to the shareholder whether they wish to receive cash or new shares and if available as an option we will be pleased to arrange a Scrip Dividend in future for you at no extra cost.
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Are there any other charges for DRIP's and Scrip Dividend plans I choose?
Hoodless Brennan does not charge you for arranging these, but there may be extra charges levied by the Registrar for a DRIP, usually 1% of the amount re-invested and includes government Stamp Duty charged at 0.5%.
Under Scrip Dividends there are no extra charges.
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How long does it take before I get the cash payment or extra/new shares from the Corporate Action?
Scrip Dividends and DRIP's take up to 9 days to complete the processing of cash dividends.
However, when the cash is credited, the transaction is backdated to ensure that shareholders receive interest from the Dividend Payment date.
If you request shares, it can take up to three weeks for the shares to be added to your portfolio in the case of a DRIP, and 1 week in the case of a Scrip.
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Why does it take longer for the shares to arrive with a DRIP?
If you request the dividend to be re-invested, it can take up to 3 weeks for the shares to be added to your portfolio.
This is because the cash is first paid by the Company to the Plan Administrator. It is then used to purchase shares in the market for every shareholder that chose to re-invest.
The Plan Administrator then sends the shares to each shareholder.
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I am thinking of selling my holding in these shares. Should I take the share option?
If you do sell your holding before you receive the dividend shares you could end up with few extra shares which you will have to sell separately.
A second sale would still incur our minimum dealing cost.
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I have DRIP's set up on my shares with you, yet a cash Dividend payment has appeared on my account - Why?
Under DRIPS and SCRIPs the Dividend cash is used to buy or allot new shares - if the cash does not buy an exact number of shares then you could have a small amount of cash that is insufficient to buy another whole share.
This is then credited back to your account or carried forward to the next dividend if an evergreen mandate has been set-up.
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What's the difference between a SCRIP and a DRIPs?
SCRIP's issue new share capital for a company and is free of costs and stamp duty.
DRIP's are different in that they reinvest dividend cash and purchase extra shares for an existing shareholders and are subject to admin costs from the Registrar and stamp duty.
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What does 'Nil Paid Shares' in My Portfolio mean?
Nil Paid Shares are issued to existing shareholders when a company conducts a Rights Issue to raise funds by issuing more shares.
As an existing shareholder the company issues you a right to purchase the new shares before anyone else, normally at a price lower than the current market price - your Nil Paid shares.
Only holders of the Ordinary Shares on a certain date, the Ex Date are entitled to Nil Paid shares.
Under the Rights Issue you are advised how many new shares you can buy and the cost to exercise the Right.
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What does an 'Open Offer' entitle me to?
Open Offers are used by companies to raise funds. They also have a ratio and a cost to subscribe, very much like a Rights Issue.
A definition of an Open Offer is provided under the section 'Definitions'.
But basically the company asks existing Shareholders if they want to buy more shares in the company at a specified price.
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Can I sell my original holding before I receive the new shares from the Rights Issue or Open Offer?
If you do sell your original holding before you receive the new shares, and then you would like to sell the extra shares you would have to make a second sale.
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How do I work how many shares I can get and the cost from a Rights Issue or Open Offer?
Under a Rights Issue or an Open Offer the ratio of the action and the call cost is how you work out the cost of the action and what you will gain.
With a Rights Issue, if you held 1000 Barclay shares and the were offered a Rights Issue of 2 new shares for every 5 held at 40p, then you could apply for 400 new shares and the cost would be 40p per share - a cost of £160.
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When do I pay for the new shares?
You pay for shares on the Call Date, which will be set in advance as part of the offer.
The dates of the Offer will be advised to you by us and published on this site under 'Announcements'.
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Do you charge commission for buying the new shares under an Open Offer or Rights Issue?
There is a £5 administration handling fee for any subscription event, but no commission or stamp duty is payable.
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Can I purchase Nil Paid Rights in a company even though I don't hold the original company?
Yes, Nil Paid Shares can be bought online as a security and normally cease being able to be bought and sold two days before the Call Date.
The onus will be upon you to inform the company of your intentions if you purchase nil-paid rights.
If we do not receive valid instructions from yourself, the nil-paid rights may be allowed to lapse.
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What is a sub division?
When a company divides its shares into a larger number of shares, it is called a Subdivision.
Companies use a Subdivision is to improve the liquidity of their share price if the price has become too high.
The more shares in issue the easier it for people to buy in smaller amounts creating liquidity in the share price.
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What are Shareholder Perks?
If you are the holder of shares in a company, some companies offer 'Share holder Perks' that entitle you to a benefit from that company such as reductions in ticket prices, discounts on things you buy through them or other advantages.
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