Originally Posted by
Snoopy
I am sure that ronaldson has been around long enough to know his stuff. Nevertheless, I think the way the above post is worded is a bit misleading on the taxation status of the DRP. Tax is paid before the net amount is re-invested in the DRP. So I don't think it is correct to say the DRP is providing a non-taxable benefit for any holders.
The qualification that ronaldson gave of 'momentum being in our favour' is a nod to the share price rising once the DRP shares are allotted. IOW what ronaldson is alluding to is a free capital gain on the DRP shares. But if it was the intent of a large holder to sell their DRP shares and cash in on the 'capital gain' from the DRP, then I am sorry to say that such a capital gain would legally be taxable. So contrary to what anyone might think, that means there is no 'free lunch' from the tax man on offer here.
SNOOPY