Just a question for those who know the technical details:
Are the imputation credits lost immediately when the ownership changes enough
OR
can they just not be carried forward into the next tax year???
Thx
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Just a question for those who know the technical details:
Are the imputation credits lost immediately when the ownership changes enough
OR
can they just not be carried forward into the next tax year???
Thx
Sorry. To be correct, to the extent a dividend is not imputed to 33% (can be altered in some situations, ie, if you have a COE), the company must withhold RWT upto the 33% amount. Therefore most dividends now will come with 28% IC and 5% RWT.
It is a debit to the ICA at the date of the breach (think of the ICA as a bank account that records tax payments in and out. On the date of the breach, the account is cleared to zero. It must be in a credit position as at 31 March).
If for some reason (ie. to correct a prior error) you had to include another debit before that date, the debit on breach would be adjusted. There are a few weird rules where tax pooling providers are used.
Thanks CJ for the clarification
Has anybody considered stripping the dividend on Sky TV. In the next 3 months we will likely get 43c dividend plus imputation credits (total 60c). Thus the share price would need to drop 60c to make a loss. There will be a cost of brokerage, slippage, and cost of capital as well.
The ex-dividend is on Monday for special dividend. The second dividend is made March 2013. So you would need to hold for 3 months. Will the commerce commission keep quiet during that period?
The average broker target is around 5.35, so it would seem undervalued much below 5.00. There might be some overhand after Todd sold out, but I'm sure CSFB would not want to make a loss (5.05 was the price that Todd sold out at). Perhaps this is currently having affect on the price?
Perhaps another options is to sell just before Xmas in the hope of a xmas rally and look to just strip the special dividend.
Is there a legal holding period for using imputation credits? I know there is in Australia with Franking Credits.
SKT featured in the Broker's View column in today's DomPost. Main points:
- 450k households coming off analogue TV will be migrating to Freeview, Sky or Igloo by end of 2013
- SKT is majority Igloo shareholder
- ComCom is investigaiing contracts with ISPs but broker does not think this a big risk
- expects rise in share price and dividend in next 2 years due to increase in subscribers
smart companies make a large dividend payment sufficent to clear the IC account before the change of ownership takes place. Have a look at Tel in the past.
The special dividend was trigger by the change of ownership losing credits, however Newscorp won't be selling, but the planned separation of Newscorp into two companies creates the change of ownership indirectly.
Read more hereQuote:
Originally Posted by 28 June 2012
FWIW, Macquarie has an "outperform" on SKT following its profit report last week.
I hold a few, legacy of the old INL days. And not selling.
I think you and Macquaries are right.I missed read things and followed Todds out the door.The result was great,and I am thinking maybe I have done the wrong thing.Brought more HNZ ,after today's result, so will be interesting to see which performs better over the next couple of years.
Yes, an interesting contest!
You may well be on to a good thing with HNZ. I havn't ever considered them seriously, being up to my gills in long-term holdings of Aussie banks which have done well for me over the years. HNZ are and should be well supported, being the only listed NZ bank here. Now if only TSB were to "corporatize" and join the lists........
:cool: