I just got notification from QBE that they have more money than they know what to do with, so they're discontinuing the dividend reinvestment and dividend election (bonus share) plans.
Aside from having to send in my bank details (again!) so that dividends can be direct credited, I'm not too fussed. DRPs used to be a good deal in the days when they were issued at a discount to the prevailing share price, but they were always a pain to keep track of for CGT calculations (even more so under the old indexation method). These days they're mostly issued at the prevailing price, so you don't get much benefit apart from saving brokerage fees. A few companies round UP to the next whole share, which can be great value for small shareholders with only a couple of thousands shares in the company - getting 8 shares instead of 7.13 can boost the dividend yield substantially.
However, this will affect my sons holding in QBE shares. He was in the Bonus Share Plan, so he didn't get any dividend to declare on his tax return (but he would later pay CGT on the entire value of the BSP shares when sold, as they are deemed to have had zero cost basis). Now he'll be getting taxable dividends to include on his tax return. Luckily he will be under the income threshold where paying the exhorbitant 'child' tax rates cuts in, and he'll get the franking credits refunded, so it's not all bad news.
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