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Tax question

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klapka
Super Contributor
Can anyone help me get my head around this? ESOR sold Geo Technical = special dividend was taxed. TCP sold Bayport = capital distribution not taxable. Both events look the same to me!
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3 REPLIES 3
MMouse
Contributor
They may achieve the same objective of paying shareholders but they are definately not the same thing. One is paide out of profits and the other is a reduction of shareholder's capital. Illovo does not pay dividends but rather pays out of reduction of captital. But you also need to understand what the difference does to your share value.
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MMouse
Contributor
They may achieve the same objective of paying shareholders but they are definately not the same thing. One is paide out of profits and the other is a reduction of shareholder's capital. Illovo does not pay dividends but rather pays out of reduction of captital. But you also need to understand what the difference does to your share value.
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THRESHOLD
Super Contributor
It depends on which reserve the dividend was declared out of (or from.) A capital profit is taxed as such in the hands of the company involved - this does not define the nature of a subsequent distribution however.
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