Ryanair EGM and B Share Choices

1

149oaks

Registered User
Messages
263
I'm lucky enough to have some Ryanair Shares and received their notice of an EGM. However I must make a decision on whether to choose the Redemption Option or Share Dividend. I don't know much about this so does anybody out there have any idea what I should do. I expect there may be some Tax implications but I don't know.
 
I presume you mean this document?
http://investor.ryanair.com/wp-content/uploads/2015/09/Ryanair-Circular-Final.pdf
I've just asked Davy Select what they are proposing but I'm assuming that the default option, being a share redemption, will be used. On this basis, it will be treated as if you had sold shares to recieve the funds (and are subject to CGT considerations) rather than dividend income, which would form part of your income tax consideration for this year. That's how I understand it anyway.
 
Here is my understanding of it. It assumes Irish resident individual shareholders. (Shares held in pension funds or held by non-Irish investors are not covered by this).

How should I vote at the EGM?
You don't need to. The EGM is just to approve the scheme. It will be passed.

If you do nothing, which is what most people should do...

If you do nothing, you will receive a capital payment of 29.42 cents per share sometime before the 16th November.

This will be subject to Capital Gains Tax as if you had sold some shares.

On 17th November, you will receive 39 new ordinary shares for every 40 shares you currently own. When you receive the new shares, you should tear up the old shares.

How will my Capital Gains Tax liability be calculated?

You will be deemed to have disposed of 1/40th of your shareholding

Let's say you bought 4,000 shares at €10 per share or €40,000

upload_2015-11-14_10-51-13.png


Thanks to Rob Oyle for correcting my initial answer to this question.

In what circumstances should I take the income option?

The only case in which you would be better off taking the shares as income would be if you had no other taxable income or taxable income below the annual tax credit. If you are paying tax at 20% or 41%, you should go for the Capital Redemption option.
 
Last edited:
Just teasing this out a bit further.

Assume CGT annual exemption used up and 51% marginal tax rate.

Let's say I bought 40 shares at €7 each or €280. They are now worth €13.50 each.

I will receive a payment of €11.77 and I will have 39 shares left.

My Capital Gain will be €4.77 (11.77 - 7)

I will be taxes at 33% or €1.57

If I take it as income, I will pay 51% tax or €2.43.

But I will still have the €7 to set against future capital gains.


upload_2015-10-27_16-35-1.png


So it's still correct to take them as Capital Gains
 
So with shares currently worth 13.40 each, and only getting 11.77 each, then why would people have voted overwhelmingly for this ? I was under the impression that we'd a cut from the Aer Lingus money, like we did with dividends previously, and we'd win, not lose.

Or have I missed something ?
 
championc said:
So with shares currently worth 13.40 each, and only getting 11.77 each, then why would people have voted overwhelmingly for this ? I was under the impression that we'd a cut from the Aer Lingus money, like we did with dividends previously, and we'd win, not lose.

Or have I missed something ?
Click to expand...

You could say that, on the other hand your share of ownership of the company is the exact same as it was before the redemption, so in the long term the value of your holding will reflect this (by way of a marginal increase in share value) so effectively you don't lose out.
 
You haven't won or lost.

Every shareholder gets the same €11.77 each. It wouldn't have mattered if it was €5 or €20. It's simply a dividend paid as capital.

In theory, after the issue of the new share/dividend, the market should have adjusted the price. I am not sure what the effective date was. As with most shares, the price is so volatile, it's hard to see the exact impact of a dividend payment.

Brendan
 
I'm not really sure what has happened in my Degiro account. It's showing "Dividend .2942 x 100 shares" and underneath "Dividend tax .0441 x 100 shares" which is subtracted from the first amount. Cash funds haven't changed either but I presume this might not happen until the dispatch of cheques date per the circular (16th Nov).

I can also see the selling of my ryanair shares and repurchase - this did result in a small change in cash funds which I think the circular alluded to with "The intention is that, subject to market movements, the share price of one New Ordinary Share immediately after Listing of the New Ordinary Shares becoming effective should be approximately equal to the share price of one Existing Ordinary Share immediately beforehand."

*100 shares is an arbitrary figure used above
 
Joey101 said:
I'm not really sure what has happened in my Degiro account. It's showing "Dividend .2942 x 100 shares" and underneath "Dividend tax .0441 x 100 shares" which is subtracted from the first amount. Cash funds haven't changed either but I presume this might not happen until the dispatch of cheques date per the circular (16th Nov).

I can also see the selling of my ryanair shares and repurchase - this did result in a small change in cash funds which I think the circular alluded to with "The intention is that, subject to market movements, the share price of one New Ordinary Share immediately after Listing of the New Ordinary Shares becoming effective should be approximately equal to the share price of one Existing Ordinary Share immediately beforehand."

*100 shares is an arbitrary figure used above
Click to expand...

Unless you're planning to dispose of shares in the coming days I wouldn't worry about it... everything will settle down and you'll have slightly less shares and more cash funds before the end of the month.
 
I am not familiar with a "Degiro" account.

Irish resident shareholders will receive the payment gross.

Degiro appears to be deducting a 15% tax from your dividend. Who are Degiro? Are you resident in Ireland?
 
I have received a Ryanair share consolidation cert the other day which seems to have doubled my shares in the company , I'm a complete novice re shares & tax implications.
Could anyone please explain in simple terms what tax I will have to pay on these extra shares .
Thanks.
Blueman
 
It's explained above but it's not simple.

When did you buy your shares initially?
I don't know how you think that they have doubled?

Brendan
 
Brendan Burgess said:
In 2007, Ryanair had a 2 for 1 share split.



So is it possible that you held approx 2540 shares?

Now you own 39/40ths of 2540 or 2476.

What are the exact numbers and you can check this?

Brendan
Click to expand...
Brendan,
I my exact original numbers of shares held
Aug 2002 170 ordinary shares of 0.01270 each
Feb 2004 1050 ordinary shares of 0.01270 each
Total 1220.

New Cert received 28th Oct 15
2379 ordinary shares of 0.006 each

Blueman.
 
So in 2007, your shareholding was doubled to 2,440

You will get 29.42 cents per share or €718.

The number of new shares is correct:

2,440 /40 x 39 = 2,379

2,379 x €14.38 per share = €34,200

So you are twice as rich as you thought you were.


Brendan
 
Brendan Burgess said:
So in 2007, your shareholding was doubled to 2,440

You will get 29.42 cents per share or €718.

The number of new shares is correct:

2,440 /40 x 39 = 2,379

2,379 x €14.38 per share = €34,200

So you are twice as rich as you thought you were.


Brendan
Click to expand...
Brendan , sounds great as I didn't hear anything about the 2 for 1 share split in 2007 nor did I get a new cert at that time, would this be normal ?
Blueman
 
You should have got a cert.

But it doesn't matter now as you have the new cert for the right amount.

At the time you should have noticed the share price halving overnight. You have a decent amount of money in the shares now, so you should keep an eye on them.

If you have no other capital gains this year, your capital gain is below the annual CGT exemption, so you owe no tax on the dividend.

Brendan
 
You must log in or register to reply here.
Back
Top