Unilever Results

[melonfool]

I don't mind foreign listed shares as long as it doesn't involve extra paperwork, such as tax records for other countries, etc.

Mel

[idpickering]

I don't mind admitting that all this doubt is causing me to consider dumping ULVR. Do I really want a share that isn't even listed here?

Yes!

But, then, I hold some foreign companies anyway such as Finnish Kone so I am perhaps more relaxed about foreign listed companies.

Best wishes

Mark.

Thanks for that Mark. It would be a shame should I sell my holdings, as they are a great company. Maybe I should just take a chill pill?

Ian.

[Dod101]

The Finance Director of Unilever has said that it is unlikely that they would remain in the FTSE100 and that is after extensive discussions with the index admin people. As has been said this was discussed on the quoted thread. Obviously FTSE100 index funds will sell them but they will become a member of the equivalent index in the EU so that may balance the selling in London. But that is why I said that the effect of the reconstruction (If it is passed) is a bit of an unknown and unsettling aspect for the shares at the present time.

As I understand it it is in any case only the PLC that is a member of the FTSE. The larger (Dutch) NV is not so there may not be as much selling as we might think.

Dod

I don't mind admitting that all this doubt is causing me to consider dumping ULVR. Do I really want a share that isn't even listed here?

Ian.

Ian

There is a lot of misunderstanding here. Unilever will continue to be listed in London (ie you will get a London quote and be able to buy and sell just as you do now) but it will probably not be able to be a member of the FTSE100. That is the only difference I think apart from a name change. Otherwise it will still be under the IFRS accounting rules, will continue to account in Euros and will offer sterling dividends. Our current shares will be exchanged for shares in the new company. We need to await the papers which will no doubt be issued before the October meetings for the details. Of course the whole thing could be scuppered if either company meeting does not pass the resolutions by the required margin.

Dod

[idpickering]

Thank you for your level headed reply Dod. Chill pill it is then.

Ian

[Darka]

No Pickering Ian, I think Unilever is a great share (for those that already hold) and I certainly won't be selling

Remember they are a ballast to more volatile shares and provide a good base income to support one's portfolio.

regards,
Darka

[idpickering]

No Pickering Ian, I think Unilever is a great share (for those that already hold) and I certainly won't be selling

Remember they are a ballast to more volatile shares and provide a good base income to support one's portfolio.

regards,
Darka

Thanks for your input Darka, and no I’m not toying with a bit of Pickering lol. As you said, they are a ballast for my HYP.

Ian

[Gengulphus]

There is a lot of misunderstanding here. Unilever will continue to be listed in London (ie you will get a London quote and be able to buy and sell just as you do now) but it will probably not be able to be a member of the FTSE100. That is the only difference I think apart from a name change. ...

No, there is another difference: its dividends will be from a Dutch company rather than from a UK company, which has taxation consequences.

As far as Dutch tax is concerned, that shouldn't cost us anything, as Unilever have said:

"Unilever N.V. dividends are currently subject to Dutch dividend withholding tax at a rate of 15%. The Dutch government has announced that the Dutch dividend withholding tax will be abolished from 1 January 2020. Following simplification of the corporate structure and until such abolition, shareholders in the new Unilever holding company will be able to receive distributions in the form of a capital repayment for Dutch tax purposes which will be paid without Dutch dividend withholding tax."

So provided the Dutch government sticks to its plans and Unilever's way of paying capital repayments in place of dividends actually works (both of which seem pretty likely), we ought to be able to avoid paying Dutch dividend withholding tax, which is basically the only currently foreseeable problem with Dutch tax. There are two possible issues relating to it, but they can only really be faced on an 'if and when' basis:

* There will probably be some admin related to making the 'capital repayment' choice.

* For UK holders, dividends on holdings in the new company will be vulnerable to future taxation decisions by both the UK and Dutch governments, whereas dividends on their current holding in the UK company are only vulnerable to future taxation decisions by the UK government. The former is obviously more vulnerable overall!

As far as UK tax is concerned (obviously only relevant for those who hold the shares outside tax shelters), it makes the difference that they are foreign dividends rather than UK dividends. If one has to fill in a tax return, that means that they have to be reported differently: for a paper tax return, they go into a different box if the total of one's taxable foreign dividends is at most £300, or into the Foreign supplementary pages if over £300, and for an online tax return, something equivalent is done via the selection of questions you're asked. It's nothing major, but it can be a bit of a nuisance, especially if the total of one's foreign dividends is more than £300 because the Foreign supplementary pages want foreign dividends broken down by country with a number of other details of each.

There might also be an issue about how the 'capital repayment' dividends in 2019 are taxed by the UK taxman. My guess is that they'll fall under the scope of the "if the shareholder gets a choice between a payment method that apparently should be income and one that apparently should be capital, it's treated as income" rule that stopped the use of "B share schemes" and "B/C share schemes" a few years ago, in which case they'll be treated just like any other foreign dividends. But that is a guess, as it might be reading more into the words "will be able to" than is intended, and there could be all sorts of technicalities about that rule that I'm not aware of. We'll probably get more information about that when details of the Unilever scheme are published.

So all in all, there will be a number of tax-related differences caused by the change from a UK company to a Dutch company. I think it's unlikely that any of them will be major, but they will exist.

Gengulphus

[Dod101]

Pro tem a lot of what Gengulphus has said is speculation. After all it may never happen. I think Royal Dutch Shell is incorporated in the UK so I suppose that is not a very good example but they have A and B shares and it is perfectly possible I assume for Unilever to do the same or some variation of it.

Rather than speculate I am content to await the papers for the meetings in October (might even attend the PLC one) and then the results of the meetings.

Dod

[Breelander]

I think Royal Dutch Shell is incorporated in the UK so I suppose that is not a very good example but they have A and B shares and it is perfectly possible I assume for Unilever to do the same or some variation of it.

Shell set up a special Dividend Access Mechanism to enable B share dividends to be paid under UK tax rules. Unilever are not proposing to go down this route.

Note 2 - Dividend Access Mechanism

A dividend access share has been issued by The Shell Transport and Trading Company Ltd (“Shell Transport”) and BG Group Ltd (“BG”) to Computershare Trustees (Jersey) Limited ) as dividend access trustee (“the Trustee”). Pursuant to a declaration of trust, the Trustee will hold any dividends paid in respect of the dividend access shares on trust for the holders of B shares and will arrange for prompt disbursement of such dividends to holders of Class B shares.

https://www.shell.com/investors/retail- ... ZXMuaHRtbA

[Dod101]

Yes Bree but my point is that Unilever are dripping out the info and it will not be until we get the full set of proposals, presumably prior to the October meetings that we will be fully up to speed with what they are proposing.

Dod

[scrumpyjack]

Overall I think it is positive that Unilever will become a purely Dutch company. Foreign companies will be better protected from crazy Momentum policies should JC get into power. They will have a UK listing which means they can still easily be bought and sold. I suspect the issue of no longer being in the FTSE100 is already discounted and anyway there will be buying by Continental index funds as Unilever will have a larger weighting in those indices.

[Gengulphus]

Pro tem a lot of what Gengulphus has said is speculation. After all it may never happen. ...

Yes, it is speculation that may never happen. So is a lot of what Dod101 has said in this thread. Anything a company says it will do is technically speculation until it has received all the required approvals and actually done it.

... I think Royal Dutch Shell is incorporated in the UK so I suppose that is not a very good example but they have A and B shares and it is perfectly possible I assume for Unilever to do the same or some variation of it.

Yes, it might well be possible. But it is not just technically speculation, but also quite unlikely speculation given that Unilever has said it intends to become "a single legal entity incorporated in the Netherlands".

Rather than speculate I am content to await the papers ...

Which would be a lot more convincing if it didn't immediately follow a rather blatant bit of speculation!

Gengulphus