pyad wrote:For HYPers why should we care either way? I've held ULVR since forever in my HYP, having managed to grab it on an acceptable yield. Whether it goes Dutch or not won't make any difference to me. It will be the same share, quoted in the UK which is the key point for me.
As a HYPer, I care about the proposed simplification in two ways. The first is very
mild: it will add to the administrative burden of my HYP starting from the first dividend paid by the new unified company. Specifically, I will have to separate out the dividends paid by Unilever from all the other dividends paid by my HYP shares (and at present, indeed from all my other dividends) and report them separately in my tax return, since they are foreign dividends.
The second is that it adds to the tax risk of my HYP: if it happens, I become subject to Dutch tax law changes as well as UK tax law changes. I can't do anything about the risk of UK tax law changes short of emigrating, which would be a very drastic step for me, but I have no desire to add extra
tax-law-change risk. I think the added risk of Dutch tax law change is only somewhere in the low-to-moderate range, but I don't think it's insignificant.
Together, I'm not certain that those add up to enough to justify the effort and costs of getting out of Unilever and finding alternative homes for the capital. If the meetings on October 26th approve the simplification, I'll have to make that decision. But I would rather not face that decision at all, and the costs of voting against the simplification have proved to be zero so far, while the effort required has been pretty minimal. So voting against it makes sense to me.
pyad wrote:ULVR stated in the doc that no tax will be deducted from divs. Either the company believes this to be true, no doubt having been advised of it, or they are outright lying, or they are spectacularly incompetent. ...
I basically have no doubt that what Unilever has said is either definitely true or given on expert advice and highly likely to be true. But my concerns are about things they haven't
said: the small-but-nonzero extra admin involved in my tax return, and the risk of tax law changes. That's not a criticism of Unilever: they're not responsible for HMRC's tax return requirements, and the possibility of tax law changes basically goes beyond the reasonable scope of the scheme document, beyond saying how Dutch tax law is currently expected to change and how they're planning to cope with the situation if that change doesn't happen. The latter sounds likely to be true if it is a simple matter of the Dutch abolition of dividend withholding tax getting cancelled, but I've no faith in that scenario: it seems likely to me that either
it will go ahead or
it will be cancelled and further changes happen to block the loophole to avoid it that Unilever's plans have exposed / established a precedent for. Just keeping the withholding tax in place and leaving the loophole wide open would be an even-more-than-usually-inept political move...
pyad wrote:... And even if at some time in the future Dutch withholding tax does come in, so what? I can then consider my options.
True, but why should I want to open up the possibility of that happening at some time in the future at all?