Dividend Arbitrage - RD:IR

July 5, 2019

The level of stock lending around ex-dividend dates spikes in roughly one third of FTSE 350 companies. But why? Dividend arbitrage (also known as dividend washing) is a trade that enables investment firms to reduce their tax bill relating to dividend payments. The method used is to place shares in alternative tax jurisdictions around the ex-dividend date so that less withholding tax will be paid. There is little that an IR professional can do in relation to dividend arbitrage, aside from understanding the mechanics behind this trade and being able to explain to senior management why trade volumes are increasing, yet the augmented volumes are not necessarily flowing through to significant changes in the constitution of the share register month on month.

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Finance 4 Business

We are one of the UK’s leading specialist finance brokerages. A multi-award-winning organization, we pride ourselves on being the go-to broker for both intermediaries and consumers. We have qualified and highly experienced individuals in every department, creating an internal network of professionals, working as a team. We have access to the high street, challenger banks and specialist lenders. Due to our excellent reputation, service and professionalism, we have EXCLUSIVE products not available direct from the lender, or via other brokers.

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