Why has my dividend booking been cancelled and re-entered?

Please note that the following answer only applies to clients of our Broker offering.‌

Have you noticed a cancellation and simultaneous re-entry for a US dividend from a real estate investment trust (REIT) in your securities account from the previous year? This is a necessary tax adjustment to ensure the accuracy of the statements. This correction process is called reclassification.

Reclassifications mostly affect US REITs because it is unclear at the time of distribution how the dividend will be treated for tax purposes. The relevant companies only report the final tax data to the US authorities during the following year. Consequently, the tax treatment of income from the previous year may change retrospectively.

To report the US withholding tax correctly to the US tax authority, the original provisional dividend entry must be reversed (cancellation). Subsequently, the dividend is credited with the correct tax treatment, as now known (re-entry).

REITs usually distribute profits four times a year, sometimes monthly. Unfortunately, it is not possible to provide a summary of cancellations and re-entries for multiple distributions. Therefore, it is normal to receive several cancellations and re-entries spread over the year.

This process takes place automatically in your securities account, so no action is required on your part.