I am an investor in Bank of Ireland and have been reinvesting my dividends with their stock alternative scheme. I was going to do the same with recent dividend but am being offered shares at E8.10 a share. As of 1pm today they are trading at E6.88 nearly a 15% discount on this price. Why would anybody but something for such an inflated price. Think I'll take the cash. Any opinions?
BOI Final Dividend Stock Alternative Option
- Thread starter noggy1810
- Start date
received the documents on Friday too. Normally take the stock but like you say no point this time. Threw the form in the bin.
Obviously if the price rockets before the deadline I'll lose out, but I'm pretty confident I'll be okay!
It's more complicated that. Suppose you take the cash dividend with the intention of buying shares. You'll pay income tax on the dividend, stamp duty and fees on purchase, and capital gains tax on any increase when selling the shares. Whereas if you take the shares your base price for CGT purposes will be a lot higher. So there might be scenarios where it makes sense to take scrip dividends at above market rates. Though it still doesn't sound like this is one of them 
Update: it looks like you do pay [broken link removed], so what I've posted above is misleading.
Update: it looks like you do pay [broken link removed], so what I've posted above is misleading.
Unless I read the accompanying documentation incorrectly ..
.. taking the dividend as stock also incurs an income tax liability. The value of the stock/dividend is treated, for income tax purposes, the same as cash.
The liability arises when you declare the amount in your tax return.
.. taking the dividend as stock also incurs an income tax liability. The value of the stock/dividend is treated, for income tax purposes, the same as cash.
The liability arises when you declare the amount in your tax return.
I've some BOI shares held in a nominee account with AIB/ Goodbodys. For dividends, I've taken shares up till now. Without viewing this thread I wouldn't have noted the high price of the shares option....No communication from AIB on this !! I've written to them today requesting a cash option instead.
Do you get this for every dividend or do you just get it once and then automatically re invest all?
DrMoriarty
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I'm in the same position, but with Fexco, and have only today received the relevant communication (although their covering letter is dated 18th June). The letter states that if I want to lift the DRIP mandate I must instruct them 'at least a week prior to any closing date with the registrars', which is now no longer possible. I plan to ring them first thing tomorrow and see what they say.
BoI shares are now trading at 5.90, over 25% off the quoted price of 8.10...
Mizen Head
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Doc
I called Fexco today and they said No Prob re lifting my Mandate
I called Fexco today and they said No Prob re lifting my Mandate
Brendan Burgess
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Just for clarification
This thread does not break the Posting Guideline of not discussing the valuation of individual shares.
It is a practical question and answer on the correct strategy relating to a decision.
It makes no sense to buy the Bank of Ireland scrip issue while the share price is priced well below it. In fact, I wonder if Bank of Ireland has the right to pull the scheme for everyone?
Brendan
This thread does not break the Posting Guideline of not discussing the valuation of individual shares.
It is a practical question and answer on the correct strategy relating to a decision.
It makes no sense to buy the Bank of Ireland scrip issue while the share price is priced well below it. In fact, I wonder if Bank of Ireland has the right to pull the scheme for everyone?
Brendan
DrMoriarty
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Thanks, Mizen Head — same here, I'm glad to say. The guy I spoke to, as soon as I uttered the words "Bank of Ireland" and "DRIP mandate", practically finished my sentence for me!
Daddy, unless you previously signed up to the DRIP scheme you should automatically get cash. But if you still haven't received any documentation by now you should probably contact the registrars (or your stockbroker) anyway.