South 32 Dividend Announcement

[SuperCally]

S32 have advised that they intend to pay an Interim Dividend of US 4.3 cents for HYE 31/12/17, and a Special Dividend of US 3.0 cents, both divis to be paid on 5 April. Ex-div 8 March, £Sterling value tba 15 March.

Sorry, not authorised to post link.

Vinny

[PinkDalek]

S32 have advised that they intend to pay an Interim Dividend of US 4.3 cents for HYE 31/12/17, and a Special Dividend of US 3.0 cents, both divis to be paid on 5 April. Ex-div 8 March, £Sterling value tba 15 March.

Sorry, not authorised to post link.

Vinny

Thanks, you'll be able to post links soon but here it is:

http://www.londonstockexchange.com/exch ... 33835.html

I've yet to refresh my memory on the withholding tax position (I hold don't hold but my better half does) but the relevant section includes mention of full and partial franking:

South32 Limited ... (South32) announced that the Board has resolved to pay an interim dividend of US 4.3 cents per share (fully franked) for the half year ended 31 December 2017 and a special dividend of US 3.0 cents per share (franked to 81%).

The record date for determining entitlements to dividends is 9 March 2018; payment date is 5 April 2018.


The half year results and outlook are here:

http://www.londonstockexchange.com/exch ... 33813.html

[Alaric]

I've yet to refresh my memory on the withholding tax position

If there would otherwise be UK tax on dividends to pay, it's likely to be reclaimable at the cost of filling in some complicated SA100 forms.

[Bouleversee]

I've yet to refresh my memory on the withholding tax position

If there would otherwise be UK tax on dividends to pay, it's likely to be reclaimable at the cost of filling in some complicated SA100 forms.

Does that still apply if held in an ISA?

[PinkDalek]

I've yet to refresh my memory on the withholding tax position

If there would otherwise be UK tax on dividends to pay, it's likely to be reclaimable at the cost of filling in some complicated SA100 forms.

Probably not reclaimable as such but offsettable, up to a maximum of the UK tax payable on the dividends, and where the dividends are declared would depend on the the size of the holding but should be included as Foreign Dividend income by those who complete UK Tax Returns, whether or not withholding tax has been applied. Some may need to fill in the Foreign Pages. Those with total Foreign Dividends (up to £300) can use Box 6 page TR 3.

However, I was talking about the Australian withholding tax, in view of and a special dividend of US 3.0 cents per share (franked to 81%). I recall the unfranked part might be subjected to Withholding Tax (depending on where held etc) and having looked here https://www.south32.net/investors-media ... nformation I think I hope I've found the answer:

South32 has obligations under law to withhold tax from the dividend in certain circumstances. Your tax obligations will vary depending on your financial circumstances and where you reside. ... If you are a non-Australian resident no Australian withholding tax applies to the unfranked portion of the dividend on the basis that it is declared to be conduit foreign income (no tax will be deducted from the franked portion of the dividend).

So it looks like no withholding tax for those in that position (except South Africans etc as per the link).

Would anyone else care to confirm?

[PinkDalek]

I've yet to refresh my memory on the withholding tax position

If there would otherwise be UK tax on dividends to pay, it's likely to be reclaimable at the cost of filling in some complicated SA100 forms.

Does that still apply if held in an ISA?

Please see my reply above, there may be no withholding tax (my interpretation but I may have misunderstood), but not reclaimable in an ISA as that's a UK vehicle not recognised overseas. Maybe in a personal pension (SIPP etc).

[PinkDalek]

Replying to self but this part If you are a non-Australian resident no Australian withholding tax applies to the unfranked portion of the dividend on the basis that it is declared to be conduit foreign income (no tax will be deducted from the franked portion of the dividend) would suggest that someone has to declare it to be conduit foreign income. I've no idea who that someone is but, if not South 32 itself, it may be the individual shareholders/their stockbrokers need to get form filling if the withholding tax is to be avoided!

TJH and other holders - where are you?

[tjh290633]

You called? Actually I've had too much on today to do more than look in briefly this morning, by which time there was already a long list of topics with unread posts.

First job was to get the details of S32's dividend. I find it ironic that a 19% increase in the interim, plus a special dividend as well, close to the same again as last year's interim, should result in a fall of almost 6% in the share price.

As I understand it, the taxation treatment varies, according to whether you get paid in US Dollars, Aussie Dollars, SA Rand or GBP. As mine arrives inside an ISA, what I know is that I get the full amount without deduction.

For shares emerged from BLT, the XIRR works out at almost 25%. The yield is now over 5%, so what's not to like. I am contemplating flogging my INDV and putting the proceeds into S32. The reception of INDV's final results was even worse that that for S32. The market is perverse, to say the least.

TJH

[PinkDalek]

You called? ... As mine arrives inside an ISA, what I know is that I get the full amount without deduction.

Sorry to have bothered you.

I think that was because the prior dividends were fully franked. As I've just said to Boulee by PM, our holding is so small it is not worth my looking at further but the answer will be of interest.

[Bouleversee]

Thanks, TJH. I think I'll top up myself.

[johnw11]

Isn't all this about "franked" dividend and withholding tax not relevant to most of us? "South32 shareholders who hold shares on the Australian register" is quite prominent in the announcement, however I would think that most of us hold S32 via the LSE, so we will simply be paid the dividend using the exchange rate to be announced on March 15.

John

[funduffer]

South32 has been one of my more successful HYP shares, being the owner of such recent duds as CLLN, Capita and Galliford Try.

I got a small holding from the split from BHP Biliton (BLT) in 2015, but then I broke my own rules in topping up to a much larger holding in March last year at £1.57. I broke my rules, because S32 had not yet established much of a dividend record (being only a couple of years old), but I judged the commodity cycle was turning, and the forecast yield at the time was 8.6%.

Anyway, as for tjh, it has turned out well. Dividends are increasing quickly, I am up on capital as well. The special is the icing on the cake.

Let's see what BLT do with their dividend next week.

FD

[Bouleversee]

South 32's s.p. down another 5.8% today. Perverse indeed! Is there something we don't know?

[PinkDalek]

Isn't all this about "franked" dividend and withholding tax not relevant to most of us? "South32 shareholders who hold shares on the Australian register" is quite prominent in the announcement, however I would think that most of us hold S32 via the LSE, so we will simply be paid the dividend using the exchange rate to be announced on March 15.

John

Yes, sorry, having looked at the other half's Tax Certificate for the October 2016 dividend and compared it with the local currency equivalent here https://www.south32.net/investors-media ... nformation, the franking credits would appear to be irrelevant to South32 UK Depository Interest holders. Incidentally, it looks like the exchange rate and local currency equivalent in that link, for the dividend payable 6 April 2017, are incorrect (having copied from the data above it).

My apologies for any misinformation.

[Bouleversee]

Well, I topped up today. At least I now have a reasonable holding and will look forward to those dividends.

[absolutezero]

Well, I topped up today. At least I now have a reasonable holding and will look forward to those dividends.

I'm considering likewise. My holding in S32 is very small and making it more meaningful would make some kind of sense.

[tjh290633]

I also have topped up S32 today, using cash released from Segro, after its considerable rise today. That has brought S32 up to a reasonable level, about 82% of my median holding.

The IRR is now over 50%, and the increase in dividend more than outweighs the loss in dividend from SGRO, which is only about half the yield.

TJH

[Gengulphus]

Well, I topped up today. At least I now have a reasonable holding and will look forward to those dividends.

I'm considering likewise. My holding in S32 is very small and making it more meaningful would make some kind of sense.

I would certainly either do that as soon as available cash permits or sell it completely. There can be reasons to keep a meaninglessly small holding around for a long period both untopped-up and unsold, e.g. after a massive fall, hopes of recovery or (outside a tax shelter) wanting to keep one's CGT-loss powder dry. But South32 at its current level simply cannot have suffered anything like a fall that massive, no matter when it was bought in its short history on the market, and I cannot see any other good (IMHO) reason why one might want to leave it around both meaningless and cluttering up one's HYP for any length of time.

In my case, I chose the sell-completely option shortly after getting the holding from its demerger from BHP Billiton (which is what resulted in my meaninglessly small holding, and I'd guess yours too?). Looking at what's happened since to the share price and dividends, it's probably performed somewhat better overall than either BHP Billiton itself or my other miner Rio Tinto. So choosing the top-up-to-meaningful-size option would probably have resulted in my HYP performing a bit better overall... But only a bit better, and it would have produced some headaches as well, such as the need to understand the Australian tax issues in this thread (*) and the fact that having three companies in a sector tends to put my HYP quite a lot closer to breaching its diversification policies than having two. The net result of that is that I don't feel any significant regrets about having chosen to sell South32 rather than top it up to meaningful size.

However, that's quite dependent on my personal financial circumstances and preferences, which probably differ from yours. So I'm not giving an opinion about which of the sell-completely and top-up-to-meaningful-size options would be best for you - only that both of those options are better than the leave-meaninglessly-small option...

(*) I do note the fact that people seem to have concluded that they don't matter, but there is a headache difference between noting that other people have drawn a conclusion and drawing it myself. Bluntly, if they turn out to be wrong, it's no skin off my nose, not even vague-feelings-of-guilt skin: I might feel vaguely guilty about failing to try to help people when it's a subject that I know a fair amount about, but not when I know essentially nothing about it! But if I turn out to be wrong about something that actually affects my own tax, it definitely is skin off my nose...

Gengulphus

[absolutezero]

Well, I topped up today. At least I now have a reasonable holding and will look forward to those dividends.

I'm considering likewise. My holding in S32 is very small and making it more meaningful would make some kind of sense.

I would certainly either do that as soon as available cash permits or sell it completely. There can be reasons to keep a meaninglessly small holding around for a long period both untopped-up and unsold, e.g. after a massive fall, hopes of recovery or (outside a tax shelter) wanting to keep one's CGT-loss powder dry. But South32 at its current level simply cannot have suffered anything like a fall that massive, no matter when it was bought in its short history on the market, and I cannot see any other good (IMHO) reason why one might want to leave it around both meaningless and cluttering up one's HYP for any length of time.

In my case, I chose the sell-completely option shortly after getting the holding from its demerger from BHP Billiton (which is what resulted in my meaninglessly small holding, and I'd guess yours too?). Looking at what's happened since to the share price and dividends, it's probably performed somewhat better overall than either BHP Billiton itself or my other miner Rio Tinto. So choosing the top-up-to-meaningful-size option would probably have resulted in my HYP performing a bit better overall... But only a bit better, and it would have produced some headaches as well, such as the need to understand the Australian tax issues in this thread (*) and the fact that having three companies in a sector tends to put my HYP quite a lot closer to breaching its diversification policies than having two. The net result of that is that I don't feel any significant regrets about having chosen to sell South32 rather than top it up to meaningful size.

However, that's quite dependent on my personal financial circumstances and preferences, which probably differ from yours. So I'm not giving an opinion about which of the sell-completely and top-up-to-meaningful-size options would be best for you - only that both of those options are better than the leave-meaninglessly-small option...

(*) I do note the fact that people seem to have concluded that they don't matter, but there is a headache difference between noting that other people have drawn a conclusion and drawing it myself. Bluntly, if they turn out to be wrong, it's no skin off my nose, not even vague-feelings-of-guilt skin: I might feel vaguely guilty about failing to try to help people when it's a subject that I know a fair amount about, but not when I know essentially nothing about it! But if I turn out to be wrong about something that actually affects my own tax, it definitely is skin off my nose...

Gengulphus

My holding in S32 came about from the de-merger from BHP Billiton.
In the end I topped up - share price rise has been good for my portfolio and, despite this, the dividend yield is fairly tasty.

Though I agree. Small holdings are neither use nor ornament.
As my old boss used to say: 'Either sh*t or get off the pot!'

[Bouleversee]

You called? Actually I've had too much on today to do more than look in briefly this morning, by which time there was already a long list of topics with unread posts.

First job was to get the details of S32's dividend. I find it ironic that a 19% increase in the interim, plus a special dividend as well, close to the same again as last year's interim, should result in a fall of almost 6% in the share price.

As I understand it, the taxation treatment varies, according to whether you get paid in US Dollars, Aussie Dollars, SA Rand or GBP. As mine arrives inside an ISA, what I know is that I get the full amount without deduction.

For shares emerged from BLT, the XIRR works out at almost 25%. The yield is now over 5%, so what's not to like. I am contemplating flogging my INDV and putting the proceeds into S32. The reception of INDV's final results was even worse that that for S32. The market is perverse, to say the least.

TJH

I think they're down over 10% now, which I find surprising. Having topped up at £1.88, I had expected them to go up as they neared the 8 March x-d date rather than the reverse. Hopefully, it's just general market volatility and an opportunity for my sprogs to top up theirs.