Primary Health Properties Interims.

[MDW1954]

There are plenty of other attractive-looking REITs and quasi-REITs out there, not priced at such a premium. See our earlier conversations. I didn't buy into WHR's recent rights issue, but continue to like the company. WHR, ASLI, LXI, BSIF, UKW, HICL, etc -- all have held up fairly well, and all HYPable within the remit of this board, if that's a concern.

MDW1954

Thanks for that Malcolm. I have had a look at Tritax Big Box BBOX this morning already, mind you they're riding high too. I'll look at the others too.

Ian.

If you want something cheaper (because the rent roll has been affected) look at ESP and CRE, which I also hold.

MDW1954

[G3lc]

I hold both PHP and and more recently ASSURA - my last purchase ASSURA because it seemed to be doing better recently.

[idpickering]

If you want something cheaper (because the rent roll has been affected) look at ESP and CRE, which I also hold.

MDW1954

Thanks again Malcolm. Regarding buying something cheaper, I don't want to be buying when the target share is riding high. They might go even higher obviously. Who knows?

Ian.

[Gengulphus]

Not sure what you mean by "entail". PID is a distribution, not a dividend, and is taxed differently. In short though if you have them in an ISA then they will be paid gross of tax, and you aren't liable to pay tax (or declare on your tax return). PHP normally pays its "dividend" (sic) in this way, part PID, part non-PID. You will possibly receive 2 distributions, depending on how Halifax does its administration of the payment from PHP to it for ISA accounts.

I assume you are a recent holder as the same would have happened last quarter for you to refer back to (22nd May to be precise).

Thanks for your input. I meant, do I have to do anything? I get it now, and am a recent new buyer of this share. We live and learn.

If you hold them in a tax shelter, with some providers you might need to be aware that you'll only receive the payment net of basic rate tax on the payment date - i.e. you'll only receive 80% of (number of shares)*(PID per share) on that date. The other 20% is paid to the taxman and then the broker claims it back - as Dod101 says, this generally takes about 6 weeks. Other brokers are able to register to receive the PIDs gross and receive the entire payment on the payment date. I can vouch for the fact that both types of provider really do exist, as I have two ISA accounts and as it happens, one is with each type of provider. (I think the fact that some providers register to receive the PIDs gross and others don't is due to differences in the exact way they hold the shares, but I'd guess that the details of that are more than you want to know!)

Of course, there's usually no real need for a HYPer to be aware of exactly when they'll receive the cash - if they want to know how much cash is in their account, they just look! But occasionally, there is a need to know whether there will be enough cash in the account by a future date, e.g. if they've got a standing order withdrawal set up or they're taking up a rights issue and want to know how much cash there will be by the broker's deadline. So awareness that it's a PID and of what type of broker you've got might occasionally affect what you need to do, but usually a payment being a PID rather than a dividend doesn't affect what you need to do at all.

If you (or anyone else reading this) hold them outside a tax shelter, being a PID rather than a dividend can affect your tax in various ways. For instance, if you have to submit a tax return, don't include them in the total you report for UK dividends. Instead, total them up separately and report them as "Other UK income" - you report the amount of income (the amount received plus the amount of tax deducted), the amount of tax deducted and describe the income e.g. as "Property Income Distributions from UK REITs".

Gengulphus

[Arborbridge]

It is priced at a premium for a reason, in this case because of the perceived security of the rent income, but you pays your money........

I appreciate that fact, but note the "froth" is coming off so hopefully they will be HYPable before long. However, I'm not too bothered either way, with 36 companies already.

The same would be true of the other REITs which MDW mentions - that is, I'm not anxious to add more companies unless I drop one of the others.

Arb.

[77ss]

...I meant, do I have to do anything? I get it now, and am a recent new buyer of this share. We live and learn.

Ian.

No.

Other than making sure that you get both the divi and the PID (and, OTBE, be sure to keep all your REITs in a tax shelter).

Some brokers pay the PID later than the divi, some pay it at the same time. I think it depends on what arrangements they have made with the taxman. I don't know about Halifax - but you should be able to check - given your BLND holding.

[Gengulphus]

Some brokers pay the PID later than the divi, some pay it at the same time. I think it depends on what arrangements they have made with the taxman. ...

Only somewhat indirectly, I believe... For all nominee broker accounts, your shares in a company and all other shares in the same company owned by other nominee clients of the broker are held by your broker's nominee company as the legal owner, essentially on trust for you and the other owners as beneficial owners. They can be held as one or more registered shareholdings in the company, and as far as the company is concerned, each of those registered shareholdings is owned by one registered shareholder, namely the broker's nominee company. So each dividend or PID payment is made as a single payment to the broker for each registered shareholding - it's then up to the broker to split it up appropriately between their clients.

The tax aspect is that a company must deduct basic-rate tax from PIDs, send it to the taxman, and send the PID net of tax to the registered shareholder - unless the registered shareholder has certified to the company that the beneficial owners of the shares in the shareholding are all tax-sheltered, in which case the company can send the entire PID to the registered shareholder. So on the reasonable assumption that a nominee broker provides both tax-sheltered and unsheltered accounts, they can either decide to keep the tax-sheltered shares and the unsheltered shares in different registered shareholdings, or to mix them up in the same shareholding. The separate registered shareholdings route allows the broker to certify the all-tax-sheltered shareholding to receive PIDs gross, so they avoid the admin of tax reclaims and they probably also have somewhat more satisfied clients because the tax amount is received some weeks earlier, but they do have the extra admin of running two registered shareholdings. The single registered shareholding route is the opposite: the broker avoids the admin of running an extra registered shareholding, but does have the extra admin of needing to do tax reclaims for the tax-sheltered shares.

So I think the main difference between brokers that drives this is their choice whether to hold their clients' shares in one registered shareholding or two. That drives whether they can make an arrangement with the company to receive PIDs gross, and if they cannot do so, they have extra dealings with the taxman. (As a minor wording point, I'd hesitate to call them "arrangements" - the word tends to imply something individually negotiated to be done differently from normal, whereas tax reclaims are completely normal dealings with the taxman when tax that wasn't actually due has been deducted at source.)

My impression when REITs and PIDs were introduced in 2007 was that brokers just went with whatever choice fitted their existing systems best - those who already held their tax-sheltered and unsheltered nominee account shares in separate shareholdings continued to do so, and those who already held them in a single shareholding also continued to do so. That and the fact that brokers still vary about it suggest that whatever the net advantage of one choice over the other is, it's small enough that incurring the admin costs of shifting to the other system is not worthwhile...

Gengulphus