AusNet Services (formerly: SP Ausnet)

[Nick]

I wish to clarify whether do individual investors in Singapore pay tax for the A$0.08 dividends received per share ? Thanks !

[KopiKat]

I wish to clarify whether do individual investors in Singapore pay tax for the A$0.08 dividends received per share ? Thanks !

You don't get the full A$0.08. There are 3 components (not a fixed proportion) in the payout. For eg., for HY Mar11 of A$0.04,

1) Franked = 1.333ct
2) Interest = 2.279ct
3) Capital Returns = 0.388ct

(2) is subjected to a 10% tax (deducted by SPAus) and the Nett Dividend you'd get was A$0.03772. The exchange rate is fixed when it's closer to the payout date (if you elected for DRP, you'll get units instead but I remembered the discount wasn't that great).

For me, no additional taxes from IRAS.

[Nick]

Thanks for the explanation !

Does that mean the dividend will be taxed prior to being deposited to the bank account or do we have to pay the 10% at the end of the year separately during income tax filing ? Is there tax in the DRP plan ?

[KopiKat]

Does that mean the dividend will be taxed prior to being deposited to the bank account or do we have to pay the 10% at the end of the year separately during income tax filing ? Is there tax in the DRP plan ?

Yes, SPAus dividend is taxed prior to its being deposited into your bank account for the 10% (of Interest Income component). No need to declare in the income tax filing.

As for DRP, I have not participated before for SPAus. I went to check and the discount is only 2.5% and I usually have the intention to sell most of my SPAus shares before it goes xd as I can usually buy it back a lot cheaper before the next HY dividend period. For those that I retain as a beachhead (or get stuck with), I've not been taxed by IRAS for the dividends received.

BUT, if my interpretation of IRAS link is correct, we (as Individuals) are exempt from tax for dividends (whether paid in cash or in kind eg. DRP). See,

http://www.iras.gov.sg/irasHome/page03_ektid5984.aspx

[Temperament]

SPAUS dividend is tax free for locals. i have collected for many years. Sold the shares, all this years.

[kichialo]

SPAUS dividend is tax free for locals. i have collected for many years. Sold the shares, all this years.

Likewise sold this year. Not too comfortable with its high gearing.

[Drizzt]

i would buy it.which power utility in the world is not geared.

[Temperament]

i would buy it.which power utility in the world is not geared.

Hi Drizzt,
Gearing is one thing, this stock can give some good dividend but not very much in terms of growth. It's good to have good dividend and at least some growth at the same time. It's very difficult to find both dividend & growth at the same time in the same stock. If buying this stock, i think i would prefer buying Singtel.
It has had right issue in the past. At least once.

[Drizzt]

singtel may eventually end up like sp ausnet, a utility.telcos are being commoitized.

[KopiKat]

i would buy it.which power utility in the world is not geared.

Hi Drizzt,
Gearing is one thing, this stock can give some good dividend but not very much in terms of growth. It's good to have good dividend and at least some growth at the same time. It's very difficult to find both dividend & growth at the same time in the same stock. If buying this stock, i think i would prefer buying Singtel.
It has had right issue in the past. At least once.

On 1st look, it does look like Singtel matches your criteria of both growth and yield. Looking at the financials from FY06, we see a continued growth in Revenue and Dividends (excluding Special Div).

BUT, on closer examination, I don't see the same growth in EPS as it hovers around the same level for the past few years and the NPM (Net Profit Margin) appears to be on the decline. The main reason for the increasing Dividend Payout appears to be mainly due to an increase in Payout Ratio.