Dividends
Dividends represent a portion of a company’s profits that is distributed to its shareholders. They form part of the total return on an investment and can provide investors with periodic income from their equity holdings. Dividends may vary over time and are not guaranteed, as they depend on the company’s financial performance and dividend policy.
Dividends play a crucial role in investment portfolios, providing a way for investors to earn income from their equity holdings. To determine if you will receive distributions and locate them, follow the instructions provided below for each platform:
LYNX+
- Login to LYNX+ and go to Portfolio tab.
- Scroll to the bottom of the page to the Cash Transactions section under Dividends.
- Make sure to select the correct period to view the payment of cash dividends.
Trader Workstation
- In the Trader Workstation, locate the Account tab and select Account Window.
- The outstanding dividend accruals will be shown within the Account Window under Market Value – Real FX Balance.
LYNX Trading App
- Launch the LYNX Trading App and log in.
- Navigate to Porfolio tab – Balances – Account details.
- You will find the Dividends Receivables under the Market Value tab in the lower part of this page.
Client Portal
To track received dividends, changes of their accruals, and corporate actions, access the account statement in the Client Portal. Find instructions and detailed information on the statement’s sections here.
For related notifications and actions, head to the Corporate Action Manager in the Client Portal. For more information, please click here.
FAQ
What types of dividends are there?
Dividends come in various forms, and understanding the differences helps to see how companies distribute profits to shareholders:
- Cash Dividends: The most common type, where companies distribute cash to shareholders on a per-share basis. The dividend is deposited into your brokerage or bank account and can be reinvested or withdrawn.
- Stock Dividends: Also called bonus shares or scrip dividends, where companies issue additional shares to shareholders instead of paying cash. They increase the number of shares held but do not necessarily change the overall investment value.
- Special Dividends: One-time payments declared outside the normal dividend cycle, often following extraordinary profits or asset sales. These are usually larger than regular dividends and provide an additional benefit to shareholders.
Where do I find the Subscription Ratio of my Rights?
The ratio of the offering indicates the proportion in which the rights are exchanged to obtain new shares. A ratio of 10:1 means that you can subscribe with 10 Subscription Rights to acquire 1 new share. Both the amount and ratio of the Subscription Rights will be listed in the Corporate Actions section of your account statement.
Where do I find my Corporate Actions?
To stay informed about corporate actions, check either the Corporate Action Manager tool or the Corporate Action section of the “Secure Message Center” in the Client Portal. For official and essential information, refer to the company’s Investor Relations page. For more information click here.
Received Corporate Actions are also listed in the Corporate Actions section of your account statement.
Can I choose between a Cash- or Stock Dividend?
The dividend is determined by the company itself. In some cases, you can choose between the type of dividend you can receive. You can read more on how to manage your dividend choices in this Corporate Action article.
I received Subscription Rights, do I need to take any action?
Submitting Subscription Rights to purchase new shares is generally a voluntary option. Sometimes, these Subscription Rights lose their value if they are not used to purchase new shares. If you take no action with these rights, these rights will become worthless. The expiration date and (if applicable) proceeds are displayed in the Corporate Actions section of your account statement.
How can I reclaim French Withholding Tax?
European withholding taxes on dividends are taxed at source. This means that the tax is withheld by the depository prior to remittance of the distribution to IBKEuropean withholding taxes on dividends are applied at source. This means the tax is withheld by the depository before the distribution is passed on to Interactive Brokers (IBKR) and subsequently credited as net proceeds to LYNX client accounts.
As described in the client agreement, IBKR holds all shares in street name. Because of this structure, the applicable withholding tax rate between the dividend-paying country (France) and the registered holder (Interactive Brokers LLC, US) is 28% for 2020 (reduced from 30% in 2019). Even if your account is maintained with Interactive Brokers Ireland Limited (IBIE) through LYNX, IBIE acts as an introducing broker to Interactive Brokers LLC, which is the official holder of record.
For further clarification, please consult the LYNX and IBKR Client Agreements. If the link below does not work, you can access the documents via our website under Online-Broker > Info > Documents and then select LYNX and IBKR Customer Agreement:
On French stock dividends, we can facilitate the process of dividend tax reclaim. To reclaim taxes you are required to complete Forms 5000 and 5001. You can find the instructions on how to reclaim the dividend tax on the website of our partner Interactive Brokers: French Withholding Tax Reclaim.
How do I see if I received a Stock Dividend?
Once your stock dividend has been paid, you can find all the details under the Corporate Action section on your account statement. Instruction and more details about the account statement, please click here.
The change in the number of shares you own will also be an indication.
Withholding Tax Rates for other countries
Virtually all countries apply withholding taxes when local companies seek to distribute dividends to externally based shareholders (whether those shareholders are corporate or not). The rate at which IBKR is obligated to withhold for a given payment depends largely upon whether there is a tax treaty in place between the US and the country of residence of the dividend recipient.
You can find a table via this link below that depicts certain the rates of withholding as applied by IBKR effective 6-1-2012 : Dividend Withholding Rates