Thank you for explaining. Should I ever receive a gross payment like this my procedure will be to declare it for dividend tax, taking no credit for foreign withholding tax. My net of tax income will be the same as if the stock had not been lent out.
It looks that payments like this made on US shares will actually work to the advantage (meaning less total tax will be taken) of anyone who pays UK dividend tax at a rate of less than 15% (ie at 0% or 7.5%).
I still see a problem of multiple tax payments on the income from a single lot of shares.
Suppose A, B, C are UK investors going long. H1 and H2 are hedge funds selling short.
A → H1 => B → H2 => C
→ means “loan stock”
=> means “sell stock”
Notice how stock lending multiplies the amount of stock. One lot of shares is now owned or lent out by 3 people.
Suppose gross dividend is $100. A and B each receive $100 as payment in lieu and owe UK dividend tax on it. C receives actual dividend and pays $15 US withholding tax and also owes UK dividend tax after taking foreign tax credit. Doesn’t this mean that on one lot of dividend payments the taxing authorities are able to take multiple bites?
If A, B, C all pay UK dividend tax at the 32.5% rate then tax of $97.50 (3x32.50) will have been collected, somehow deriving from a dividend of only $100. $15 to IRS and $82.50 to HMRC.
Ok but how about letting us use our voice to vote when it comes to the stocks that we are invested it. With T212 we currently don’t get that opportunity to vote so the playing field is not even. You have continuously said it is in the pipeline but it never comes to light. All shareholders need a voice and we are currently being silenced.
I always think it is a good to check if a requested feature is already being offered by one of the more expensive UK platforms.
For instance, Hargreaves Lansdown does not provide a facility to exercise voting rights for US shares. They explain that this is because shares on their platform are held as Crest Depository Interests and are in the name of Hargreaves Lansdown Nominees Ltd or an approved third party.
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As a lot of the responses have said, if your voice is a priority for you as an investor, you will need to look beyond a free service.
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They’ve already allowed voting for a stock last week and are expanding this outwards once they can achieve automation.
Really you should know at least something about the things you’re complaining about.
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Yes I am aware of the GME vote that was pushed through so I know it is possible. But what about all the other stocks. Meme stocks don’t interest me. I am more interested in votes for a stock that actually makes a difference to the business.
I am aware of what I am complaining about but the information from 212 is inconsistent and poorly published.
If it can be done for one it should be done for all across the board.
You don’t get to pick n chose who has the right
They do I’m afraid, as much as you as the consumer have the right to go to a paid service if it’s important to you.
Same. The GME vote was weird, but perhaps a test in the practicalities of rolling something out going forward. End of day we don’t have the right to vote in our shares that are out on loan, which ultimately pays for our lower cost trade service.
It wouldn’t surprise me as Jobloggs says, if we want to vote, then we may need to pay some other charge for 212 to make revenue to cover operational costs.
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