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Newby here and first time poster, so pls be gently, im a Tesco employee and looking for some advice from all you smart peeps?
1. Any Tesco employees that have shares tied up in a SAYE scheme should see a greater return in the 2,3 or 5 yrs time they mature as they have already been allocated a set number of shares and hopefully are well over £3. Tesco has also put in 2.5billion into the pension so this “should” make the company more solvent/appealing for future investors.
2. I usually get my dividends paid by reinvesting in more shares, instead of cash, when this happens on 12th Feb, will the shares from my “reinvested dividend” buy the shares and put them into my account straight away?
The scenario I do not wanting is for my dividend to be paid to me on the 12th Feb i.e. Sold and rebought on 26th, a lot can happen in that 2 weeks, theoretically they could be selling my dividend shares at £2.40p and buying them back on 26th at £2.70p, if this is the case I would just change to a cash dividend and hope they are below £2.40 when the dust settles.??
3. I have 21,000 shares in Shareview, I’m looking at around £10,600 dividend and proby have to pay close to £850 tax, then there is the prospect of the shares being less than £2.40 on 16th, 17th etc, I don’t have any ISA accounts, what would you recommend?
Ideally I want to keep my shares in for the long term i.e. 10 yr plus but maybe think a stock & shares ISA etc??
In response to 2), the 12th is the register date. This is the date you need to hold shares on to receive the divident, not the date it is paid. It is then paid on the 26th at whatever price it is on the 26th, providing everything is voted in favour of.
Fat fingers couldn't spell dividend on my phone, apologies
It is a lot to have invested in one company. Some RBS employees lost a lot of money when it went to ruin and they lost a career's worth of bonus shares.
One thing for you to consider is whether to use this as an opportunity to diversify 25% of your holdings into something else. you could open up a stocks and shares ISA with your bank and fund it with your special dividend.
Travel and oil shares are at a long term low at the moment for example and depending on your appetite for risk might make you a lot more money than Tesco over the next few years.
You need to consider it thoroughly!
Gunner. Nice holding you’ve built up there. I love share save schemes as a method of saving/investing.
My dividends are auto reinvested in my sipp, isa and general share accounts and usually the payment is received on dividend payment date or the day after and its reinvested within 48 hours.
As for the number of Tesco shares you are holding in shareview I would echo tenapenny’s thoughts. Currently you have all your eggs in one basket. I know people who worked at Centrica who took part in the share save schemes and failed to diversify given that the company was essentially as safe as houses and it cost them.
Not having an isa will cost you in the long run too. I would look at setting up a stocks and shares isa with a provider of your choice (ajb, hl, Lloyds etc) and then consider either selling some tsc and moving the funds into your new isa or if you still wish to retain the tsc shares look into a service called bed and isa that most providers offer as it lets you sell the shares and rebuy them in the isa wrapper immediately so you are less exposed to price increases/decreases.
I’m not qualified to give financial advice and even if I was I wouldn’t recommend you listen to anyone on an lse chat board anyway. But I would seriously consider doing a bit of research into why it makes sense to have a diversified portfolio.
You have a choice in most isa’s to hold etfs, funds, investment trusts and trackers and these can give you exposure to USA/Europe emerging markets etc. In fact some providers such as ajbell and Hargreaves even have products that do the whole balancing stuff for you selecting a basket of funds that meet you risk criteria although I personally prefer to do my own investing. There’s a lot of good quality info online but also most isa providers will have good information on their websites (available to read even if you don’t have a product with them). Make sure you understand the charges a fund or investment trust charge.
Even if you think Tesco’s is only going one way (up hopefully) and you wish to retain your full compliment of 21,000 shares one piece of financial advice I am going to confidently give you is to look into getting your existing shares put into an Isa. If you do choose one that does the bed and isa process they may require you to move your existing shares from shareview to them first (that’s just a transfer) before they can do to bed and isa. So act quickly because if you get the ball rolling now you will be able to put £20k into an isa under this years allocation (before April 5th)and put another £20k into the isa under next years (after April 5th). Like I say even if you leave all your shares with Tesco this is worth doing because there will be no future tax liability on dividends or shares sold etc.
Hope that’s helpful, good luck.
Gunner. You read a lot on these boards that is complete rubbish but Pmoran has taken his time to write a very good response to your questions. It all makes perfect sense but I didn’t see where you said all the shares you own are with Tesco (probably my bad) but if they are then I’d seriously consider some diversification.
Just looked at what happened to all the people that have out their money into banks over the past 10-20 years! Good luck into whatever you decide. If you’re an Arsenal fan then I hope you loose all your money-just kidding, but I do hope you loose all your games. COYS.
For colleagues, specialist explanations can be found from various Tesco and Equinit sources. The following is text pulled from yesterday's email.
"We have more information on tax in our detailed Q&A on Our Tesco, and in the circular sent to shareholders on 25 January 2021 and 2 February 2021....... There is also additional information on the Our Tesco web site....... If you have any further questions about your shareholding, please telephone the Tesco Shareholder Helpline on 0333 207 6381 from the UK or +44 333 207 6381 from outside the UK*. For questions on your share plans, please call the Equiniti helpline on 0371 384 2927 from the UK or +44 371 384 2927 from outside the UK*, or email myshareplan@equiniti.com. Telephone lines are open from 9:00am to 5:00pm (UK time), Monday to Friday, excluding public holidays in England and Wales"
Yes Stocks and shares ISA would be top of my list. You currently get £20K a year so if you open one now you'll get this years allowance then another on 6 april. No tax return to fill in on the shares there and that'll be £40K shielded from CGT.
Thanks guys for your input and advice, i have just sold the max i can before i get hammered on CGT and will be opening a S&S isa going to put in £20k this yr and anther £20k in April. Thanks and i think its my time to get my fingers in other pies...????
Hi. This may be a silly question but i've not been involved in this type of consolidation before.
Am I right in thinking that the 15 shares held (rather than original 19) will be worth the same value as the original 19? Does that make sense ? Help anyone. Thanks
Thats the Tesco boards plan, but you never know whats going to happen
There is over 9billion shares out there and major players too, holding millions.
Rafafan
Not quite. The 15 shares will represent the same proportion of the business as the original 19.
Hi Gunner,
If you want to move your Tesco shares into a stocks and shares ISA, your £50k investment would need to be moved across 3 tax years as you are allowed only £20k tax free ISA allowance each tax year (from 6th Apr to 5th Apr following year).
The link below provides an explanation from AJ Bell on how its Bed and ISA works. Effectively you are selling your shares and buying them back into the ISA account. You will only be able to buy investments in your ISA up to the value of your unused ISA allowance for this tax year
https://www.youinvest.co.uk/isa/bed-and-isa#:~:text=What%20is%20a%20bed%20and%20ISA%3F%20A%20bed,so%20there%20is%20less%20exposure%20to%20market%20movement.
Another thing to note is, you may be realising gains/profits on selling your Tesco shares so there may be capital gains tax to pay. The first £12300 gains/profits are tax free for this tax year. But it depends on how you acquire the shares in the first place (via Share Incentive Plan SIP, Save As You Earn SAYE) and how long you have kept the shares in your name.
The below article gives a good explanation on Capital Gains tax
https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-shares-ambbh8b4kuxt#:~:text=When%20you%20get%20employee%20shares%20from%20a%20SIP,the%20shares%20%28but%20no%20relief%20for%20losses%20either%29.
https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-shares-ambbh8b4kuxt#:~:text=When%20you%20get%20employee%20shares%20from%20a%20SIP,the%20shares%20%28but%20no%20relief%20for%20losses%20either%29.
Hope the above helps.
Rafafan,
It is my understanding that all else being the same, the consolidation would have raised the price of the shares proportionately, so that 15 new shares would have been of the same value as the pre-consolidation 19. But as a hefty dividend is coming out of the money pool, the stock price post-consolidation won’t budge all that much. Say one has 19000 shares which at 1.42 each will be worth £26980 on the 11th Feb. On the 15th, you will have 15000 shares which at 1.42 will be worth £21300. You would have received a dividend worth £9676.70 payable on the 26 February. So you might come marginally ahead but remember the tax bill for the dividend. I am speculating on the price a little bit as it might shoot up close to the 11th and then pull back. I don’t think the amount of dividend will change, no matter what the price. It is fixed at £0.5093 per pre-consolidation share.
Thanks for the replies guys, appreciated!
Gunner22
Vital to get some fingers in other pies.
It makes sense.
Over long periods of time individual companies , even apparently strong ones ,can fade away or even disappear.
Find the original FTSE 100 list to confirm.
Keeping by your eggs in one basket is an unnecessary risk. This is especially true when you have built up a significant holding which will be important to you later in life.
My opinion only of course but I think it will be a widely held one!
These would be north of 300p if not for this SD and consolidation.
I'm just waiting now for sbry to overtake the tsco sp and tsco is the better company
Spindler, in just over a week that wont apply and maybe they will start to climb up to the 300p range. Less shares in issue. EPS looking better and lockdown continuing towards Easter.
News from Kantar saying TSCO had maintained it's market share of 27.3% whilst Asda declines. You could argue that the sp of all supermarkets will decline as more restrictions get lifted going forward. However, there has been no big uplift in the MC's of the big four during the last 12 months so you would nit expect to see profit taking.
Not denying TSCO is a bit of a plod but in these uncertain times investors will look to a defensive stock whose earnings cover the yield. I do think £3 is a real possibility.
I like Tesco as a company and I want to still be invested but not getting in again yet...if the share price dives by the SD amount after ex div that takes it back to 200p...and with the share consolidation they are relying on the market to reprice the shares reduced share float back to around the 2.40+ range at least....does the SD and consolidation happen separately with a lag or simultaneously ? . If there is any sense in the world once Sd out of the way the way should be clear for the broker estimates to come to be ..I do see these being worth 300p or more NOW if it wasn't for SD & consolidation. ...but certainly once Sd etc over with....if Mr Market cooperates
Sorry Spindler but can't agree that the SP will drop after consolidation. Those that hold the stock for the SD will continue to hold the stock post consolidation, with the hope that the SP continues to climb. Otherwise there's no point on holding the stock at consolidation.GLA
Of course the SP wont dive after consolidation - that's the whole point of the consolidation - to keep the SP the same. Lockdowns , best online supermarket and staycations will keep this doing well ... plus some fairly chunky normal divvies this year.
Good to see SP threaten 250p again today.
More I think about it, difficult it becomes to make a decision. I did some calculations and looking at the scenario where the share price remains more or less the same after consolidation, dividend-tax won’t leave me enough to buy back to increase my shares to the original level. In fact, it will be way fewer shares. If the price increases after consolidation, the no of shares I could purchase with dividend leftover will be even less. The price therefore has to come down considerably to make it back to the original level. I am leaning a little towards unloading the shares before the 11th and look at reinvesting later; in Tesco or elsewhere or a combo of the two.
Seems all you posters after the rns were right...it's anchored in the 2.40 range like a carnival cruise ship in a pandemic
Seems like the only gainers from this, are the brokers, with their sell and buy charges, and the taxman, don't think it will make much difference to me as I hold it in a Sipp, or will it ?