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Re: BHP Group (BHP)
Posted: January 25th, 2022, 4:27 pm
by idpickering
Bouleversee wrote:I hold BHP in 2 ISAs. What is going to be the situation as regards tax? Am I right in thinking that the Australians deduct a withholding tax and will this be reclaimable on shares in an ISA?
Good question Lorna. I hold them in my ISA too. I know we've talked about this as a team on this board, but just to clarify, will my BHP shares still feature on the FTSE100? If not, I'm not sure I want hold a share listed in Australia solely.
Ian.
Re: BHP Group (BHP)
Posted: January 25th, 2022, 4:35 pm
by scrumpyjack
idpickering wrote:Bouleversee wrote:I hold BHP in 2 ISAs. What is going to be the situation as regards tax? Am I right in thinking that the Australians deduct a withholding tax and will this be reclaimable on shares in an ISA?
Good question Lorna. I hold them in my ISA too. I know we've talked about this as a team on this board, but just to clarify, will my BHP shares still feature on the FTSE100? If not, I'm not sure I want hold a share listed in Australia solely.
Ian.
BHP is keeping it's London listing but it will not, as I understand it, be in the FTSE100 as it is no longer a UK company. So nothing will change for us UK investors except that the dividends will go on your tax return in the foreign section. Also as I understand it the dividends will be 'fully franked' which means that BHP has paid enough Australian corporation tax to cover the Australian dividend tax. As they are not actually deducting tax from the dividend it is not reclaimable or offsettable in the UK. You are taxed as if the net dividend was the dividend before tax and as if there was no franking or withholding tax.
I stand to be corrected by others more familiar with this but I think that is how it will operate.
Re: BHP Group (BHP)
Posted: January 25th, 2022, 4:51 pm
by idpickering
scrumpyjack wrote:
BHP is keeping it's London listing but it will not, as I understand it, be in the FTSE100 as it is no longer a UK company. So nothing will change for us UK investors except that the dividends will go on your tax return in the foreign section. Also as I understand it the dividends will be 'fully franked' which means that BHP has paid enough Australian corporation tax to cover the Australian dividend tax. As they are not actually deducting tax from the dividend it is not reclaimable or offsettable in the UK. You are taxed as if the net dividend was the dividend before tax and as if there was no franking or withholding tax.
I stand to be corrected by others more familiar with this but I think that is how it will operate.
Thanks very much for your reply, and for clarifying things for me (and others too I guess). Interesting times indeed. I wonder where they'll feature on the LSE if not the FTSE100?
Today I received this notification from Halifax about this matter;
Important Information & Other Key Dates:
On 2nd December 2021, following a review of its dual-listed company structure, BHP Group Plc announced its intentions to unify its corporate structure under its existing Australian parent company, BHP Group Limited.
The Acquisition, which will be conducted by way of a Scheme of Arrangement, received shareholder approval at a General Meeting and Court approval at a Court Meeting both held on 20th January 2022. The Scheme will then be subject to Court sanctioning at a Court Hearing to be held on 25th January 2022.
Subject to acquiring the necessary approval, the Scheme is expected to become effective on 28th January 2022.
Prior to the Scheme becoming effective, an application will be made to the London Stock Exchange for the cancellation of listing of the BHP Group Plc shares. Subsequently, the cancellation of admission to trading is expected to become effective on 28th January 2022 with the last day in dealings expected to be 28th January 2022.
Ian.
Re: BHP Group (BHP)
Posted: January 25th, 2022, 6:28 pm
by Bouleversee
This (from ii) gives a bit more detail:
"The Limited shares are expected to be admitted to the standard segment of the FCA Official List and to trading on the
LSE’s Main Market."
Not that I know what it means
Re: BHP Group (BHP)
Posted: January 25th, 2022, 7:03 pm
by idpickering
Bouleversee wrote:This (from ii) gives a bit more detail:
"The Limited shares are expected to be admitted to the standard segment of the FCA Official List and to trading on the
LSE’s Main Market."
Not that I know what it means
Thanks Lorna. You're not alone in that.
Ian.
Re: BHP Group (BHP)
Posted: January 25th, 2022, 8:30 pm
by monabri
idpickering wrote:Bouleversee wrote:This (from ii) gives a bit more detail:
"The Limited shares are expected to be admitted to the standard segment of the FCA Official List and to trading on the
LSE’s Main Market."
Not that I know what it means
Thanks Lorna. You're not alone in that.
Ian.
I'm taking a bit of a guess here but a company could list on the "standard segment" OR the "premium segment". They have different regulatory requirements with standard being cheaper than premium.
https://www.valuethemarkets.com/analysi ... difference"The Main Market is made up of ‘premium’ and ‘standard’ listing regimes. A premium listing is typically used by large firms looking to benefit from an increased profile and highly liquid market. Indeed, it is
only with a premium listing that a company can be eligible for inclusion in the FTSE indexes. To maintain a premium listing, companies must meet the UK’s highest standards of regulation and corporate governance and pay significant costs.
For those who are uninterested or
unlikely to benefit from the liquidity and exposure of a premium listing,
a standard listing is more likely to be of interest. For a standard listing, firms only have to comply with minimum EU requirements and pay lower fees."
I'm guessing that they will "go premium" in Aus.
Re: BHP Group (BHP)
Posted: January 25th, 2022, 9:26 pm
by kempiejon
A quick look at a chart suggest those not wanting the different listing could probably get more than they bought their BHP shares for and buy something else.
Re: BHP Group (BHP)
Posted: January 25th, 2022, 9:31 pm
by csearle
monabri wrote:I'm guessing that they will "go premium" in Aus.
So am I. Clearly BHP Billiton are not small fry. They want a continued exposure on LSE. They are not going to be buying tickets at the back. C.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 3:41 am
by idpickering
kempiejon wrote:A quick look at a chart suggest those not wanting the different listing could probably get more than they bought their BHP shares for and buy something else.
You’re right. That thought has crossed my mind a number of times today.
Ian.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 6:55 am
by idpickering
idpickering wrote:kempiejon wrote:A quick look at a chart suggest those not wanting the different listing could probably get more than they bought their BHP shares for and buy something else.
You’re right. That thought has crossed my mind a number of times today.
Ian.
I obviously meant yesterday. It was early lol. Further to my last though, tbh, I'd rather just do nothing, and maybe just live with it. Hmm?.....
Ian.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 6:57 am
by Dod101
csearle wrote:monabri wrote:I'm guessing that they will "go premium" in Aus.
So am I. Clearly BHP Billiton are not small fry. They want a continued exposure on LSE. They are not going to be buying tickets at the back. C.
No need to guess. When they made the original announcement they said they were going for a standard listing on the LSE. Has something changed?
They will also drop out of the FTSE of course.
Dod
Re: BHP Group (BHP)
Posted: January 26th, 2022, 9:28 am
by Arborbridge
What's a HYP-chap to do?
I'm happy to hold on if all things are equal and this isn't going to be a "problem" for either my dividends or my record keeping - particularly regarding the HYPTUSS and the ease of running it.
Alternatively, I could ditch and partially switch into RIO, putting the balance into ITs. Naturally, that is a hard sell, given the high yield BHP has - no one wants a drop in income.
If I ignore, what trouble, if any, am I laying up for myself and Mrs Arb?
Arb.
PS at times like this, is when we most keenly miss Gengulphus. I miss him coming on with his authoritative statements.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 9:34 am
by idpickering
Arborbridge wrote:What's a HYP-chap to do?
I'm happy to hold on if all things are equal and this isn't going to be a "problem" for either my dividends or my record keeping - particularly regarding the HYPTUSS and the ease of running it.
Alternatively, I could ditch and partially switch into RIO, putting the balance into ITs. Naturally, that is a hard sell, given the high yield BHP has - no one wants a drop in income.
If I ignore, what trouble, if any, am I laying up for myself and Mrs Arb?
Arb.
PS at times like this, is when we most keenly miss Gengulphus. I miss him coming on with his authoritative statements.
My thoughts exactly Arb. I was just toying with selling my BHP holdings, topping up my RI! As was my plan anyway, and buying Persimmon with the rest of the dosh. As you say, what’s a HYPer to do? But we can’t discuss HYPs here of course.
Ian.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 9:37 am
by scrumpyjack
Arborbridge wrote:What's a HYP-chap to do?
I'm happy to hold on if all things are equal and this isn't going to be a "problem" for either my dividends or my record keeping - particularly regarding the HYPTUSS and the ease of running it.
Alternatively, I could ditch and partially switch into RIO, putting the balance into ITs. Naturally, that is a hard sell, given the high yield BHP has - no one wants a drop in income.
If I ignore, what trouble, if any, am I laying up for myself and Mrs Arb?
Arb.
PS at times like this, is when we most keenly miss Gengulphus. I miss him coming on with his authoritative statements.
Really can't see why you need to do anything. In practice for the private investor nothing of substance has changed. BHP is more diversified than Rio so they are not the same. If in doubt do nowt is what I would do (though I'm not in doubt. I will just hold both)
Re: BHP Group (BHP)
Posted: January 26th, 2022, 9:41 am
by Arborbridge
scrumpyjack wrote:Arborbridge wrote:What's a HYP-chap to do?
I'm happy to hold on if all things are equal and this isn't going to be a "problem" for either my dividends or my record keeping - particularly regarding the HYPTUSS and the ease of running it.
Alternatively, I could ditch and partially switch into RIO, putting the balance into ITs. Naturally, that is a hard sell, given the high yield BHP has - no one wants a drop in income.
If I ignore, what trouble, if any, am I laying up for myself and Mrs Arb?
Arb.
PS at times like this, is when we most keenly miss Gengulphus. I miss him coming on with his authoritative statements.
Really can't see why you need to do anything. In practice for the private investor nothing of substance has changed. BHP is more diversified than Rio so they are not the same. If in doubt do nowt is what I would do (though I'm not in doubt. I will just hold both)
Just to clarify: like you I am not planning to do anything. However, if there emerge some elements which impose extra inconvenience on me, I will think again. I'm all for keeping life simple at the moment.
For example, if it turns out I need to report these as foreign earnings on my tax return, and/or other practical inconveniences arise - they would be triggers to think again. I can't be doing with awkward bits and pieces to mess about with.
Arb.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 9:54 am
by scrumpyjack
Arborbridge wrote:Just to clarify: like you I am not planning to do anything. However, if there emerge some elements which impose extra inconvenience on me, I will think again. I'm all for keeping life simple at the moment.
For example, if it turns out I need to report these as foreign earnings on my tax return, and/or other practical inconveniences arise - they would be triggers to think again. I can't be doing with awkward bits and pieces to mess about with.
Arb.
It isn't complicated and if you have any ETFs (eg most trackers, which are Dublin domiciled, you will be entering divis on the foreign page already).
Re: BHP Group (BHP)
Posted: January 26th, 2022, 10:01 am
by Dod101
Arborbridge wrote:scrumpyjack wrote:Arborbridge wrote:What's a HYP-chap to do?
I'm happy to hold on if all things are equal and this isn't going to be a "problem" for either my dividends or my record keeping - particularly regarding the HYPTUSS and the ease of running it.
Alternatively, I could ditch and partially switch into RIO, putting the balance into ITs. Naturally, that is a hard sell, given the high yield BHP has - no one wants a drop in income.
If I ignore, what trouble, if any, am I laying up for myself and Mrs Arb?
Arb.
PS at times like this, is when we most keenly miss Gengulphus. I miss him coming on with his authoritative statements.
Really can't see why you need to do anything. In practice for the private investor nothing of substance has changed. BHP is more diversified than Rio so they are not the same. If in doubt do nowt is what I would do (though I'm not in doubt. I will just hold both)
Just to clarify: like you I am not planning to do anything. However, if there emerge some elements which impose extra inconvenience on me, I will think again. I'm all for keeping life simple at the moment.
For example, if it turns out I need to report these as foreign earnings on my tax return, and/or other practical inconveniences arise - they would be triggers to think again. I can't be doing with awkward bits and pieces to mess about with.
Arb.
Actually I bet a lot of taxpayers will simply ignore or forget that BHP is a foreign share anyway and just lump the dividends in with their UK holdings, but of course why not just ensure that they are held in an ISA or a SIPP?
Presumably if they have a London listing you can buy and sell in sterling and receive dividends in sterling.
Dod
Re: BHP Group (BHP)
Posted: January 26th, 2022, 10:47 am
by idpickering
scrumpyjack wrote:
Really can't see why you need to do anything. In practice for the private investor nothing of substance has changed. BHP is more diversified than Rio so they are not the same. If in doubt do nowt is what I would do (though I'm not in doubt. I will just hold both)
Wise words indeed scrumpyjack. Have a rec/thanks! In fact, you’ve given me cause to have a rethink. I’m going to do nowt, and just continue holding both RIO and BHP. Mind you, being fickle like I am, that stance might change, but tbh I doubt it.
Ian.
Re: BHP Group (BHP)
Posted: January 26th, 2022, 12:46 pm
by Bouleversee
If there is no withholding tax, I can't see any problem. I shall sit tight. But, of course, mine are in ISAs. Won't it be like RDSA and RDSB before their name change?
Re: BHP Group (BHP)
Posted: January 26th, 2022, 1:21 pm
by idpickering
Bouleversee wrote:If there is no withholding tax, I can't see any problem. I shall sit tight. But, of course, mine are in ISAs. Won't it be like RDSA and RDSB before their name change?
Like you Lorna, my BHP shares are in an (my) ISA, so I guess that should negate any concerns re tax. As for the Shell issue, I've not noticed any difference save for the name change. Maybe we're fretting over nothing re BHP?
Ian.