If you have bought shares and they have gone up in value you may therefore think it is time to sell. It could be but I hope that this was part of an investment plan.

If you do decide to sell there is one general factor that should be considered relating to the sale. I must make it clear that I am only referring to shares in a profitable company that actually is paying dividends, definitely not about speculative companies that have yet to make a profit or find any gold or nickel or tin or whatever it is they are looking for.

There is a day on which shares are quoted on the stock exchange as being “ex-div”. This is the day after the company share register is ruled off and everyone on that list gets the dividend. If you sell your share “ex-div” that means that the dividend will be paid to the person whose name was on the company list the day before, you, and the person who has bought the shares from you does not get the dividend.

If you sold the shares on the day before then you are selling “cum-div” which means that your buyer is entitled to the dividend and he will claim it from you as part of the settlement process in settling the share transaction.

The price of a share is always lowered on the first ex div day by at least the amount of the dividend.

Depending on your over all tax situation you should know the timing of the first ex div date and establish whether you want extra dividends or extra capital gain or loss from that particular share trade.

It could make a big difference to your tax bill.