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Introducing the LemonFools Personal Finance Calculators

Baronsmead offers

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
james188
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Baronsmead offers

#192195

Postby james188 » January 9th, 2019, 2:42 pm

The offers have now been launched and it will be interesting to see what the take up is this time around. I expect that they will be popular.

A couple of things particularly caught my eye. First, Baronsmead are not offering ongoing trail commission to execution only brokers, so whilst the likes of Wealth Club will facilitate online applications for HNWI/Sophisticated Investors, the attraction of sharing in that commission is not available. Secondly, existing shareholders (rather than the manager) are effectively funding an early bird incentive, because new investors who subscribe by 4 February will be entitled to the 4.5p final dividends that are payable in early March. In principle, I prefer to see dividends that have already been declared being paid only to existing shareholders.

Kidman
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Re: Baronsmead offers

#192670

Postby Kidman » January 11th, 2019, 10:45 am

My prospectus and extra application form arrived in the post this morning. It reminded me that only BSV took the trouble to send a personalised application form which must help the Registrar allocate new shares to the correct account as well as save the shareholder from some writing!

I note that BSV has now gone past its existing shareholder preferential period and is open to all so perhaps takeup for British Smaller, Northern and Baronsmead will all be significantly slower than in recent past years?

james188
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Re: Baronsmead offers

#192736

Postby james188 » January 11th, 2019, 2:00 pm

There was one further point in the Baronsmead offers that I wanted to comment on. In the note to Section 4 of the Subscription Form (Dividend Payments for New Shareholders), the following statement is included - "Investors should also note that dividends that are reinvested do not count towards your annual allowance".

Because Baronsmead operate a DRIP and not a DRIS, it has always been the case that whilst the dividends are tax free, investors do not get 30% initial tax relief on reinvested dividends (as of course they would with a DRIS). However, my clear understanding has always been- and still is, for that matter - that ANY reinvested dividend counts towards the £200,000 maximum permitted investment limit in a tax year. There will not be huge numbers of investors who invest right up to the annual limit, but anyone who reads this sentence (as I did, at first glance) as suggesting that you can get income tax relief on DRIP amounts that take you over £200,000 in this tax year would be well advised to check that point extremely carefully.


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