Explanation of First Dividend

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1

I received my first dividend recently and I want to fully understand it.

The notification says:

On 22.05.2020 Nordic American Tankers Limited (NAT) distributed an ordinary dividend of $0.12 per share. You have received ÂŁ27.46.

The history says:

DATE RECEIVED: 11 Jun 2020
TYPE: Ordinary
NUMBER OF SHARES: 293
AMOUNT PER SHARE: $0.12
TOTAL AMOUNT: +ÂŁ27.46

So, 293 shares @ $0.12 = $35.16. According to Yahoo! Finance, the dividend was actually $0.14. For 293 shares, that would be $41.02.

The GBP/USD exchange rate ranged from 1.21 and 1.28 between 22/05/2020 (distribution date) and 11/06/2020 (received date).

I believe 15% tax should be withheld from dividend payments on US stocks.

So given all these pieces, can somebody explain to me how my dividend is calculated? Specifically:

  • Why is the “AMOUNT PER SHARE” listed as $0.12 instead of $0.14? If the 15% tax is deducted from $0.14 then that would give $0.119, which would round to $0.12, but it seems unlikely that Trading 212 would handle the tax this way, as the rounding difference would subsequently be multiplied by the number of shares.
  • What exchange rate was used to calculate the GBP amount? What date/time of exchange rate was used?

Are there any plans to supplement the amount of information that is shown in the dividend history? I think it should also contain:

  • The actual dividend amount (assuming I’m not mistaken above)
  • The distribution date
  • The total gross dividend in the stock currency
  • The tax in the stock currency
  • The total net dividend in the stock currency after the tax is deducted
  • The exchange rate
  • The exchange rate date/time
  • The total gross dividend in the Trading 212 account currency
  • The tax in the Trading 212 account currency
  • The total net dividend in the Trading 212 account currency after the tax is deducted
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2

They might take it before hand and give u what ur gna receive rather than giving you at 0.14 then deducting it will be confusing. Rather receive what ur gna get with all fees done already but dno

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3

Hi @Supraman,

It is cool you took time to elaborate the topic, but if you did search on the topic, you would find it was discussed more than few times already…

One of them:

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4

Hi @Vedran

Oops! You’re right; that topic is almost identical to what I posted. I promise I did search for “dividends” but I obviously didn’t scroll down far enough.

Having said that, the situation doesn’t seem to have improved since March so hopefully it’s worth revisiting.

5

Well I guess we have to be patient, it is virtue of investing. But I feel your pain, have same issue with dividends…

6

Yesterday I received a notification that says:

On 22.05.2020 Nordic American Tankers Limited (NAT) distributed a bonus dividend of $0.02 per share. You have received ÂŁ4.96.

The history says:

DATE RECEIVED: 18 Jun 2020
TYPE: Bonus
NUMBER OF SHARES: 293
AMOUNT PER SHARE: $0.02
TOTAL AMOUNT: +ÂŁ4.96

My original post on this topic was an attempt to understand the discrepancy between the $0.12 per share dividend I received and the $0.14 listed on Yahoo! Finance. So, did NAT really pay me a dividend and a bonus with a delay between the two? Or, is this “bonus” share a correction of a mistake made by Trading 212, possibly drawn to their attention by my post?

7

There was no official reply yet.

But your topic is not the first on subject:

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8

Sorry. That’s twice you’ve had to tell me off for this single topic!

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9

Well at least you take time&effort to introduce your case…

Maybe @Team212 can provide feedback on the situation with NAT dividend “bonus”.

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10

Hello, @Supraman! We’ve allocated another payment of 0.02 USD per shares since we had a minor issue regarding NAT dividend. The addition to 0.14 USD which was 0.02 has been distributed as a Bonus dividend.

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11

Thanks @Martin. That’s very helpful.

I’ve received a few other dividends since this one, so I feel like I need to check them too.

12

Hi @Martin, my other dividends are all exactly the same.

Now that I’ve received multiple dividends, I can see the pattern. It appears that the actual dividend is being reduced by 15% (presumably for the withholding tax) and then rounded to 2 decimal places for the “Amount Per Share” figure. I’ve seen a few suggestions that this might be the case, but I thought it seemed extremely unlikely due to rounding issues.

You mentioned that there was “a minor issue regarding NAT dividend”. If that’s the case and you were right to distribute the bonus dividend of 0.02 then am I due other bonus dividends? Or was everything actually okay with NAT in the first place?

I think you will continue to receive many questions about dividends until you release the update that includes additional information in the dividend history.

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13

US based companies pay distribution from which IRS takes 30%, reduced if your country has tax treaty. Let us say you are from UK, it is 15% witholding tax on US based companies. NAT is Bermuda based, Bermuda doesn’t have witholding tax, thus the “bonus” as obviouslya glitch in T212 taxed dividendfor 15% while it should be 0%. For US based it is natural to have 15% cut of dividend pre payout…

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14

Brilliant, thanks!

I saw Bermuda mentioned in the other topic, but I didn’t realise that was the issue. I simply thought the figure was supposed to be the actual dividend figure of $0.14 instead of $0.12.

I think the decision to represent the dividend net of tax is very misleading, especially when it is rounded to 2 decimal places.

I hope it isn’t rounded during the actual dividend calculation as I suspect that would lead to erroneous results.

15

Well T212 communicated that they have enhancement of dividend payout information in the pipeline so it will get delivered sooner or later :slight_smile: