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ISA and delisted shares

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ISA and delisted shares

#167620

Postby XFool » September 20th, 2018, 8:51 am

A thought has just occurred to me, I wish it had occurred previously...

A have a holding in an investment trust in an ISA. It is going into liquidation and been delisted. Suppose I wanted to transfer the ISA to another provider, I have no current plans to do so, would there be any problem with this?

TIA

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Re: ISA and delisted shares

#167631

Postby SalvorHardin » September 20th, 2018, 9:30 am

Unfortunately once a share has been delisted it can no longer be held in an ISA. This is because shares have to be listed on a recognised stock exchange in order to be held in an ISA.

You can still transfer the ISA but the proceeds from the liquidated investment trust have to be paid to you outside the ISA (and can't be put back into the ISA without counting against the current year's allowance).

Here are the rules.

https://www.gov.uk/guidance/stocks-and- ... hares-isas

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Re: ISA and delisted shares

#167632

Postby doug2500 » September 20th, 2018, 9:33 am

In a nominee account I had to surrender my ownership of a worthless share to move broker.

I can't remember if it was delisted or in administration.

Just because it's delisted doesn't mean it's worthless of course, it depends on the details. If there is any residual value you would forfeit the rights to it.

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Re: ISA and delisted shares

#167648

Postby Dod101 » September 20th, 2018, 10:32 am

SalvorHardin wrote:Unfortunately once a share has been delisted it can no longer be held in an ISA. This is because shares have to be listed on a recognised stock exchange in order to be held in an ISA.

You can still transfer the ISA but the proceeds from the liquidated investment trust have to be paid to you outside the ISA (and can't be put back into the ISA without counting against the current year's allowance).

Here are the rules.

https://www.gov.uk/guidance/stocks-and- ... hares-isas


I cannot believe that; in fact it is not true unless transferring the ISA at the time makes any difference. If so just wait until the liquidation process has been completed before making the switch. When my holding in London & St Lawrence was liquidated (and delisted beforehand of course) it just sat there until the assets were liquidated and my share of the proceeds were paid to me inside an ISA where it was held. In fact I got the final payment quite recently inside the ISA.

Dod

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Re: ISA and delisted shares

#167807

Postby XFool » September 20th, 2018, 10:58 pm

Dod101 wrote:
SalvorHardin wrote:Unfortunately once a share has been delisted it can no longer be held in an ISA. This is because shares have to be listed on a recognised stock exchange in order to be held in an ISA.

You can still transfer the ISA but the proceeds from the liquidated investment trust have to be paid to you outside the ISA (and can't be put back into the ISA without counting against the current year's allowance).

Here are the rules.

https://www.gov.uk/guidance/stocks-and- ... hares-isas

I cannot believe that; in fact it is not true unless transferring the ISA at the time makes any difference. If so just wait until the liquidation process has been completed before making the switch. When my holding in London & St Lawrence was liquidated (and delisted beforehand of course) it just sat there until the assets were liquidated and my share of the proceeds were paid to me inside an ISA where it was held. In fact I got the final payment quite recently inside the ISA.

Umm...

The rules quoted don't seem to explicitly say what happens if a qualifying share is subsequently delisted. So far, as Dod101 says, it is still shown in the ISA account but at zero value as it has no quoted price. There is an exclamation mark against the share ("no quoted price") and also against the total ISA value. In my spread sheet I'll show it as listed at the final closing price, adjusted as necessary as money is returned (assuming returned into the ISA). We shall see. Looks like possibly many years of discrepancy between my and the broker's ISA valuation.

I wasn't really thinking this one. I have the same IT outside the ISA and was concentrating on that as, following the last tender offer, the new share certificate was not received from the registrar. That of course meant I had 'lost' the certificate and it all sounded more complex and expensive than I realised to get a new one. As tender offers were now over in favour of a liquidation I just let it go as I did not need the certificate, but didn't think about the ISA holding.

I am not contributing to this ISA (an ex PEP) at all and haven't done so since PEPs stopped.

Anyway, the ex certificated holding will let me know what is going on wrt the liquidation so I can keep an eye on the ISA holding. Bit of an irritation though.

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Re: ISA and delisted shares

#167836

Postby Dod101 » September 21st, 2018, 6:42 am

In fact the Liquidation of London and St Lawrence took to the initial payout well under a year. I then got two further very small amounts as things progressed. The last payout was maybe a couple of years down the line. If there is no litigation pending, then the winding up process for an investment trust is quite straightforward, sell the assets, pay any creditors, collect any debts, pay the shareholders and its done. Not like say Carillion where the process will take years because of the complexity of the business, no doubt claims and counter claims and so on, but as there will be nothing for the shareholders it will not impact them.

On the IT front, I once held a split investment trust during the 'magic circle days of the splits and that took years, partly because of the unwinding of the various inter relationships and the 'blame game'.

I am sure if you have patience, things will simply take their course and inside the ISA you will eventually end up with a pile of cash. I am sure there is no need for you to do anything. I am sure if the rules had applied, I would have been advised by either the ISA managers or the Directors of L & St L. This was a voluntary liquidation and reconstruction and those involved had nothing to hide and were highly respected.

Dod

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Re: ISA and delisted shares

#176046

Postby XFool » October 24th, 2018, 8:38 pm

An unwelcome development.

Following an initial liquidation payment the correct sum was paid into my ISA. But now my ISA provider has removed the delisted IT shares from my ISA, shown as "Liquidation". But liquidation has yet to complete, with one or more further payments expected, and now there is no trackback to my share holding as it has been removed from my account.

Looks like a mistake to me.

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Re: ISA and delisted shares

#176184

Postby XFool » October 25th, 2018, 12:17 pm

...The explanation is that the shares themselves have now been removed from the ISA (not valid in an ISA as no longer listed?) but they still record my holding outside the ISA and I will receive any future payments due.

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Re: ISA and delisted shares

#246364

Postby XFool » August 22nd, 2019, 6:45 pm

XFool wrote:...The explanation is that the shares themselves have now been removed from the ISA (not valid in an ISA as no longer listed?) but they still record my holding outside the ISA and I will receive any future payments due.

I'd just like to update this.

I have indeed received promptly a further correct cash liquidation payment, directly into my ISA for this now unlisted security.

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Re: ISA and delisted shares

#272578

Postby XFool » December 20th, 2019, 2:09 pm

Following on from the above wrt the consequences of an IT listed on the main market, that I held in an ISA, being delisted prior to liquidation. That seems to be going OK as it was delisted and no longer shown in the ISA, nevertheless a subsequent liquidation payment has already been made into the ISA.

I am now faced with a similar situation with a company in a HSDL ISA. The company is being run down, several share redemptions have already taken place, and it is now due to be delisted from AIM and liquidated. In this case HSDL have sent a corporate action message saying if the shares are not sold by the delisting date they will be "removed" from the ISA and placed in an ordinary HSDL share account. I don't know how these delisted shares will be shown in my HSDL share dealing account but I am surprised at this seeming difference from my other ISA provider in that HSDL's approach means any liquidation proceeds will not be directed into the ISA, unlike my other ISA provider.

A post above by SalvorHardin pointed out the ISA rules wrt shares eligible for an ISA - excludes delisted shares - but I am not sure how they relate to liquidation payments following a delisting of a previously valid ISA share.

Does anyone have any comment or similar experience?

This is only of academic interest in this case, as the remaining rump of shares here are of only nominal value.

Thank you for any comments or help.

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Re: ISA and delisted shares

#273702

Postby XFool » December 28th, 2019, 12:40 pm

This is beginning to look like possibly a right mess.

XFool wrote:This is only of academic interest in this case

But unfortunately not now in relation to both the previous share liquidation in an ISA and, by implication, possibly my current rather late self assessment.

I asked HSDL about them removing this - to be delisted from AIM - share from my ISA into an ordinary share account. After internal queries the answer came back: "It is HMRC rules, no unlisted shares in an ISA." Implying liquidation payments would therefore be made outside the ISA. OK in this case, as long as I know. But what of the previous case and ISA manager?

I mentioned to HSDL the previous case of a similarly delisted share in my other ISA and it's liquidation payments going into the ISA. The HSDL guy said that sounded wrong to him as such payments would therefore seem to be an ISA Contribution into that ISA from an unlisted share outside the ISA. I have to say it sounded logical.

If correct this is now very bothersome.

1. That other ISA is AFAIAC 'inactive'. Last contribution I made, it was a PEP! It is the (now) HSDL ISA that I make active payments into (not yet made this year). It also implies that last year I may have unwittingly made contributions into two separate share ISAs in the tax year. Nobody has complained.

2. If those liquidation payments were not really inside the ISA then they MAY also have CGT implications. Both this year and unfortunately the previous tax year as well.

I need to speak to the other ISA provider and am also waiting a call back from HMRC.

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Re: ISA and delisted shares

#273708

Postby PinkDalek » December 28th, 2019, 1:14 pm

XFool wrote:[2. If those liquidation payments were not really inside the ISA then they MAY also have CGT implications. Both this year and unfortunately the previous tax year as well. ...


For anyone else following this, XFool has posted on this aspect at Taxes:

viewtopic.php?f=49&t=21043

I may reply over there when more time available.

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Re: ISA and delisted shares

#274080

Postby XFool » December 30th, 2019, 8:47 pm

Had a call-back from HMRC Self Assessment today. They don't know.

Makes sense I guess as "We don't really know about ISAs", because ISA transactions are not recorded on Self Assessment. Recommend I contact the ISA Manager, as they will know or "They can call a special number (at HMRC) for advice".

Agree that I could opt to file my assessment without this problem, I then have up to a year to correct the assessment if necessary.

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Re: ISA and delisted shares

#282012

Postby XFool » February 3rd, 2020, 7:01 pm

Continuing this.

I filed my Tax Return OK, without dealing with any CGT issue. I confess I have not as yet contacted the original ISA manager, as advised by HMRC, wrt the earlier delisted (and disappeared) share holding and subsequent proceeds going into that, otherwise inactive, ISA.

Meanwhile, the time has come and gone for the second company delisting - in my active HSDL ISA. Thus far, contrary to their previous corporate action notice to me (of it having to be moved out of the ISA) they still list the share inside my ISA! Albeit with no current price quote, obviously. I will watch developments.

Confusing, isn't it?

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Re: ISA and delisted shares

#283489

Postby XFool » February 10th, 2020, 6:41 pm

The latest is that HSDL have now moved the delisted share out of my ISA into the ordinary share account, as they said they would.


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