Dividend waivers

Dividend waivers

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When you waive your right to a dividend this is waived against a holder, can you waive your right to the dividend on some of your shares, say 50% 

 

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By johngroganjga
17th May 2018 11:28

This is a legal question, but I think I have heard that the answer is no.

The way to achieve whatever the desired result is is for the company to pay two dividends in quick succession - with the shareholder in question waiving their entitlement to one of them but not the other.

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Replying to johngroganjga:
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By CW2012
17th May 2018 11:53

Thanks for the reply, I can't seem to get an answer re a partial waiver, If I transferred some shares to another person then they could waive their right to the dividend on those shares but the dividend is declared in pence per share, not per person, this became a problem recently as I wanted to transfer some shares into a trust but at the same time vote dividends to the holder.

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Replying to CW2012:
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By Tax Dragon
17th May 2018 12:21

Not sure if you meant this, but trustees would not as a rule be able to waive dividends.

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By Justin Bryant
17th May 2018 12:07

Surely the simple solution is to waive your entitlement above X pence (X based on the 50% amount) per share?

SK in the link below agrees:
https://www.accountingweb.co.uk/any-answers/partial-dividend-waivers

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By CW2012
17th May 2018 12:45

Thanks for the help, just to labour the point, lets say 100 shares ordinary shares in issue, £100 available in reserves for distribution, 5 share holders 20 shares each, 3 then can waive their right to receive £10, 50% of their holding, 2 will receive the full distribution covering all their shares. Is it then a question of preparing a waiver notice for shares numbered say 1-10 and receiving the dividends on shares 11-20.

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Replying to CW2012:
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By Justin Bryant
17th May 2018 13:23

I see no reason why, if the waiver is worded correctly, that does not work too.

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By tonycourt
17th May 2018 22:25

I can't see the problem in waiving the entire dividend on some shares or part of a dividend on some or all of the shares.

Model Articles of Association envisage dividend waivers " in respect of a share", which suggests a waiver can be for one or more shares owned by a shareholder. However, I can't think of any reason why the Articles could not be amended to allow for a partial waiver "in respect of a share". There's nothing in statute that I'm aware of that prevents this - why would there be ?

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By tonycourt
17th May 2018 22:27

Deleted - duplicated post

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By Justin Bryant
18th May 2018 10:31

I have not researched the point, but you would want to avoid any argument from HMRC (or whoever) about the deed being void for lack of certainty etc. (as possibly you cannot be certain which share(s) the waiver relates to if it is on a partial basis and does not specify the actual share(s) that it relates to, as shares are of course fungible).

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