Ex-dividend date

Hi everyone,

Can anybody share the knowledge and experience on how many days before ex-dividend date you need to buy a stock in order to get the dividend, keeping in mind that in T&C of T212 says that the orders are settled on T+2 manner. My understanding is that the orders are settled 2 business days after the order has been executed. And does it mean that you need to buy 2 days before ex-dividend date? And if you sell the stock on the next day of ex-dividend date, will you still get the dividend on payout date?
Thank you.

You will receive the dividend if you buy any time prior to the ex-dividend date, even if it is just the previous day.

If you sell on the ex-div or after you will receive the dividend.

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Thank you Richard.W for your reply.

He replied to that part :slight_smile:

You can sell on ex dividend date or any other day later and receive the dividend.

But it doesn’t make sense to time this, as it is priced in.

Thanks Vedran.
Yes, he probably added that part a bit later. :+1:

@Dumitru_C: @Vedran is right. People get too worked up about buying before or after the ex-dividend date. They think there is some advantage in buying in time to collect the dividend - but there is not, as the share price adjusts to reflect this.

In fact, for a UK taxpayer who pays tax of 20% on capital gains and 32.5% on dividends one could argue it is better to avoid dividends and see the return coming as capital gains. But if you are in a band such your taxes are nil then it should be insignificant difference between capturing a dividend or not.

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Thanks again Richard for your explanation. In my country the tax for dividends is 5% and for capital gain is 10%.