I find the dividend rather curious . I hasten to state from the start that i dont care about receiving a dividend . I joined the society to buy the wine and explore the culture of wine . However I have discovered that in some years enough profit is made for the committee to declare a dividend.
In exploring the rules I find that though money is added to a members share account know one actually receives any money during their lifetime. The dictionary defines dividend as the distribution of profits to share holders by the directors of a company. So it would seem the wine societies dividend is in name only. If so whats the point in having a dividend ? Am i missing something here?
Is it a tax avoidance method? in 2013/2014 review it states " The Committee declared a total dividend of £2.4m (£1.5m in 2012/13) [note 6 to the financial
statements] which was split between 3% (£0.6m), transferred to the members’ accumulated
profit account [note 15 to the financial statements] and 2% sales discount dividend (£1.8m)
transferred to the sales discount account [note 16 to the financial statements].
******* The effect of this total dividend was to extinguish the tax on current activities to zero (£2,000*
in 2012/13). Once adjustments were made to the prior year liability and the deferred tax asset,”
Clearly its an interesting aspect of the culture of the Society. I would be glad if someone could enlighten me.strong text