If you are a Santander shareholder, you should have received correspondence from Santander regarding the final dividend for the 2019 financial year.

What this means

The May 2020 dividend (subject to shareholder approval) will be partly paid as a normal cash dividend and the remainder distributed through the Santander Scrip Dividend Scheme.  This affects all shareholders, including those in the Dividend Reinvestment Scheme (DRIP).  It is our understanding that this will be a one-off special dividend and your payments will return to normal for the 2020 interim dividend.

There are 3 options available to you in respect of receiving the non-cash element of the dividend payment as follows:-

Option 1 – You retain your rights and receive new shares.  There is no Spanish Withholding Tax.

Option 2 – You sell your rights on market and receive cash.  This option incurs a brokerage fee of 0.3%.  There is no Spanish Withholding tax.

Option 3 – Your sell your rights off market and receive cash.  This option does not incur a brokerage fee, however there is Spanish Withholding tax of 19% withheld.

Your current option is shown by Santander on the correspondence issued.  If, however you wish to change your option you will need to do this by 5pm on 4 May 2020.  You can make a change by logging in to www.santandershareview.com

If Options 1 and 2 are applied there will be Spanish Reporting requirements.

How we can help

Spanish Tax Law requires the income received to be reported on a Form 210 and tax paid at 19%.  Lambert Chapman LLP have been working with our Spanish associates to streamline this process.

We will be able to file on your behalf but there will be an additional fee. 

If you wish to sell your Santander shares, a Form 210 still needs to be submitted to the Spanish Authorities.

Any foreign tax paid can be set against UK Tax due on the same income.

Our Senior Tax Manager Lucy Orrow is available to answer any further questions or queries about this scheme. Contact lucy.orrow@lambert-chapman.co.uk or call 01376 326266.

The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.

Lambert Chapman Chartered Accountants

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