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BHP Billiton Limited Message Board

  • linda_mod@sbcglobal.net linda_mod Jun 16, 2013 12:39 PM Flag

    BBL or BHP ?

    Does anyone understand the differences between shares of BHP and BBL? I know there are tax differences, but wonder why all of you chose BHP over BBL if you are U.S. citizens.

    Sentiment: Buy

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    • Here is a clip from the Australian Tax Office website:

      "Franked dividends

      "If you are a non-resident of Australia, the franked amount of dividends you are paid or credited are exempt from Australian income and withholding taxes."

      You can find this ATO info page by googling "australian withholding tax on dividends".

      Here is a clip from the UK Treasury:
      "Withholding tax is not applied on dividend payments to non-residents."

      You can find this by googling "uk withholding tax on dividends to non-residents".

    • BHP Billiton Group is a Dual Listed Company [two companies operating as if merged, consolidated operating and financial basis]. First of all "BHP" is the US ADR for two shares of the Australian part of the DLC: BHP.AX. BBL is the US ADR for two shares of the UK part of the DLC: BLT.L. How all this works is explained in the Group's annual report available on their website. No one knows why BBL sells at a discount, other than the currency difference in the underlying shares. There are tax differences for UK and Australian citizens owning the underlying shares of the ADR's. Australia does not tax dividends to the extent that the corporation has already paid tax on the income (called Franking).

      I own both ADR's and no tax is withheld on either one.

 
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