Share Dividends - daft question.
Discussion
Can someone simply explain how share dividends work.
Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year
seems a little to good to be true.
As I said - probably a really stupid question!
Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year
seems a little to good to be true.As I said - probably a really stupid question!
levron73 said:
Can someone simply explain how share dividends work.
Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year seems a little to good to be true.
As I said - probably a really stupid question!
you usually just get a check in the post. shareholing x dividend. ie 1000 x 23p in this case....Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year
seems a little to good to be true.As I said - probably a really stupid question!
Tony*T3 said:
levron73 said:
Can someone simply explain how share dividends work.
Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year seems a little to good to be true.
As I said - probably a really stupid question!
you usually just get a check in the post. shareholing x dividend. ie 1000 x 23p in this case....Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year
seems a little to good to be true.As I said - probably a really stupid question!
The dividends paid are based on the amount of profits of the company that the board decides will be distributed to the shareholders. Some profit is distributed, some is retained.
Large PLCs tend to issue dividends twice a year, an interim dividend part way through their financial year and a final dividend shortly after the financial year end.
In certain circumstances, the directors may chose not to issue any dividends, or issue an alternative type of distribution - such as new shares to existing shareholders in lieu of a dividend.
Dividends are taxable in the hands of the recipient (i.e. you). However, that does not mean you actually have to pay any tax in the dividend.
When you receive your dividend, the voucher will show a " 10% tax credit". For example, if you received a £90.00 dividend, the Tax Credit will be £10.00 (making a gross dividend of £100.00). You are taxable on the £100 but the Revenue will not ask you to pay any tax on the £100 unless you are a Higher Rate Tax payer. If you are, you will be asked to pay tax at 32.50% on the Gross Dividend i.e. you will owe the tax man £32.50 on a £100.00 Gross Dividend.
Large PLCs tend to issue dividends twice a year, an interim dividend part way through their financial year and a final dividend shortly after the financial year end.
In certain circumstances, the directors may chose not to issue any dividends, or issue an alternative type of distribution - such as new shares to existing shareholders in lieu of a dividend.
Dividends are taxable in the hands of the recipient (i.e. you). However, that does not mean you actually have to pay any tax in the dividend.
When you receive your dividend, the voucher will show a " 10% tax credit". For example, if you received a £90.00 dividend, the Tax Credit will be £10.00 (making a gross dividend of £100.00). You are taxable on the £100 but the Revenue will not ask you to pay any tax on the £100 unless you are a Higher Rate Tax payer. If you are, you will be asked to pay tax at 32.50% on the Gross Dividend i.e. you will owe the tax man £32.50 on a £100.00 Gross Dividend.
Tony*T3 said:
levron73 said:
Can someone simply explain how share dividends work.
Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year seems a little to good to be true.
As I said - probably a really stupid question!
you usually just get a check in the post. shareholing x dividend. ie 1000 x 23p in this case....Say I was to purchase 1000 RBS shares at 182p and it states that the dividened is 23p i.e roughly 12%, does that mean that once a year I will be given 12% of my original 1000 shares free of charge?
Assuming that the share price remains at 182p over the year
seems a little to good to be true.As I said - probably a really stupid question!
Buying shares in a trading company is a glorified form of gambling.
The company may or may not make any profit. Therefore dividends are never guaranteed. Even if the company DOES make profits, dividends may not be paid.
Most people invest in shares on the expected rise in value of the value of those shares. The "profit" is made when the shares are sold. Obviously, for the best part of ten years the stock market has been pretty volatile and gains have been patchy.
Obviously, you can be lucky and pick a company or set of companies to invest in that may give you gains.
Don't forget also, that gains on investmnents are subject to Capital Gains Tax.
The company may or may not make any profit. Therefore dividends are never guaranteed. Even if the company DOES make profits, dividends may not be paid.
Most people invest in shares on the expected rise in value of the value of those shares. The "profit" is made when the shares are sold. Obviously, for the best part of ten years the stock market has been pretty volatile and gains have been patchy.
Obviously, you can be lucky and pick a company or set of companies to invest in that may give you gains.
Don't forget also, that gains on investmnents are subject to Capital Gains Tax.
Edited by Eric Mc on Thursday 2nd October 14:14
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