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Hi everyone,
I know people ask about this all the time. Shell is going to remove the scrip program sometime next year and I own RDS.B in my Roth and traditional IRA and RDS.A in my non retirement account. I have owned RDS.B and do not reinvest as I would receive the A shares so I just receive the cash dividend. My issue is I purchases the A in my non retirement account and reinvested the shares and there was no tax withholding with Vanguard. Has anyone else had this experience? I would reinvest the B shares in my retirement account and receive the A shares if there is no tax witholding. Thanks in advance!
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12-22-2017, 01:25 AM
(This post was last modified: 12-22-2017, 01:48 AM by rayray.)
Reinvested RDS.A dividends incur no tax, the dividend tax is only when you receive the dividends in cash. The Scrib or Reinvestment Mechanism has been suspended 4Q17?
I have RDS.A and RDS.B shares in my ROTH
RDS.A--Dutch Law (subject to Dutch tax until 2019?)
RDS.B--UK Law (Tax laws have changed concerning Dividends received over a certain amount, changed 2016?)
It's been a while since I read about this so, I may be wrong on some things...all I know is that I pay zero taxes on my RDS.A/B investments within my ROTH.
Starting in and around 2019 due to Dutch tax changes concerning dividends the difference between RDS.A/B will be negligible., except price per share.
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Thanks for the information. I did not know that if you reinvested the A shares that there is no tax withholding but only if you take the cash. Looking back, I would have turned on reinvestment of the dividends with the B shares in my retirements accounts and reinvested the A shares thereafter.
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Well, when the dividends are reinvested RDS.B shares are not issued only RDS.A shares. When I was with Vanguard all my reinvested dividends became RDS.A shares; however, when I transferred everything over to Fidelity RDS.B shares dividends are received in cash while RDS.A shares are reinvested back into the security. I don't know if that's something with RDS or Fidelity/Vanguard? I do know I was able to sign up for the scrib with Vanguard but Fidelity doesn't participate, so that could have been an issue. In either case, I have the reinvest divi option on for both classes and no taxes are withheld so I'm fine with the investment in my ROTH. I'm not sure how this would work since your securities are in two different types of accounts, I'm assuming if RDS only issues one class in divi's then you'd have to own both classes in the same account.
Foreign investments can be confusing and this was one of them due to Dutch taxing laws.
Canada on the other hand was very cut and dry and easy to understand. All these foreign/U.S. tax treaties are different from country to country, including their tax rates.
