Income from RIETs...

[Changeable]

Back again!

Question...

If PID payments are subject to a 20% withholding tax, and non-PID payments are paid gross without any deductions,
why would a company choose to make the distribution to shareholders from one rather than from the other ?

I notice that since 2018, Reginal Reit didn't make any non-PID distributions...

Good weekend everybody!

Changable

[dealtn]

Back again!

Question...

If PID payments are subject to a 20% withholding tax, and non-PID payments are paid gross without any deductions,
why would a company choose to make the distribution to shareholders from one rather than from the other ?

I notice that since 2018, Reginal Reit didn't make any non-PID distributions...

Good weekend everybody!

Changable

You need to consider it from the company's perspective as well as the shareholder.

A REIT doesn't have to pay the Corporation Tax, therefore the "pot" is bigger to pay dividends. Obviously that is attractive to companies who take on REIT status. The consequence though is they have to pay out a minimum of 90% eligible profits as a PID.

[Changeable]

You need to consider it from the company's perspective as well as the shareholder.

A REIT doesn't have to pay the Corporation Tax, therefore the "pot" is bigger to pay dividends. Obviously that is attractive to companies who take on REIT status. The consequence though is they have to pay out a minimum of 90% eligible profits as a PID.

If I now understand it correctly, a REIT is legally obliged to pay at least 90% of its distributable income out as a PID.
Then it's only the from the remaining 10%, (after the 90% has been paid) that could eventually be paid out as a Non PID

Thanks for your help!

Changeable

[dealtn]

You need to consider it from the company's perspective as well as the shareholder.

A REIT doesn't have to pay the Corporation Tax, therefore the "pot" is bigger to pay dividends. Obviously that is attractive to companies who take on REIT status. The consequence though is they have to pay out a minimum of 90% eligible profits as a PID.

If I now understand it correctly, a REIT is legally obliged to pay at least 90% of its distributable income out as a PID.
Then it's only the from the remaining 10%, (after the 90% has been paid) that could eventually be paid out as a Non PID

Thanks for your help!

Changeable

Nope, because there is also non-eligible profits to consider, out of which they can pay non-PIDs too

[MDW1954]

You never actually said whether you bought any RGL or not -- just that you'd placed a small limit order at 60p.

I ask because they're at 80p now...

MDW1954

PS I've now bought the extra CREI to which I alluded.

[Changeable]

You need to consider it from the company's perspective as well as the shareholder.

A REIT doesn't have to pay the Corporation Tax, therefore the "pot" is bigger to pay dividends. Obviously that is attractive to companies who take on REIT status. The consequence though is they have to pay out a minimum of 90% eligible profits as a PID.

If I now understand it correctly, a REIT is legally obliged to pay at least 90% of its distributable income out as a PID.
Then it's only the from the remaining 10%, (after the 90% has been paid) that could eventually be paid out as a Non PID

Thanks for your help!

Changeable

Nope, because there is also non-eligible profits to consider, out of which they can pay non-PIDs too

I don't qualify for the tax relief and this makes it more difficult to accurately estimate the probable income...

[Changeable]

You never actually said whether you bought any RGL or not -- just that you'd placed a small limit order at 60p.

I ask because they're at 80p now...

MDW1954

PS I've now bought the extra CREI to which I alluded.

Instead of sensibly buying them at market and paying + - 62, I was greedy and put in a limit order at 60p.
The price rocketed, I thought that there would surely be a correction in a day or two, and I finally ended up paying 75p...
Fortunately, it was for a relatively small amount...

I'm waiting for the funds to arrive from the takeover of William Hill, and when the cash is on my account, I'll worry about what to buy next...

[MDW1954]

I'm waiting for the funds to arrive from the takeover of William Hill, and when the cash is on my account, I'll worry about what to buy next...

NRR is still cheap. I've been buying that, too.

MDW1954

[Changeable]

I'm waiting for the funds to arrive from the takeover of William Hill, and when the cash is on my account, I'll worry about what to buy next...

NRR is still cheap. I've been buying that, too.

MDW1954

Thanks, I'll have a look at them tomorrow...

Changeable

[mickeypops]

I hold two REITs in my income portfolio, Standard life property and Regional. Recent dividends have been cut by 40% and 20% respectively.

At least this is better than Newriver, which I have had a “nibble” at in a separate ISA account, and which has cancelled dividends entirely until next year, and has seen a 50% capital loss....

MP