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Early Voting Fee

Practical Issues
genou
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Early Voting Fee

#357077

Postby genou » November 16th, 2020, 4:29 pm

I have received such a payment, in the course of this https://www.londonstockexchange.com/new ... s/14718953 debt management operation.

The amounts involved are trivial, but I would still like to understand the tax consequences. My gut reaction is that it is a nothing for tax, but I have not managed to establish this by Googling. I can't think of where to look - it's not really a QCB issue and I can't find anything in ITTAOI.

meldrewlives
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Re: Early Voting Fee

#358945

Postby meldrewlives » November 22nd, 2020, 8:29 am

I can think of one recent example in relation to a retail bond where the the voting fee was classified as a return of capital.

eisman
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Re: Early Voting Fee

#359381

Postby eisman » November 23rd, 2020, 6:10 pm

It seems to me that the Early Voting Fee may constitute a 'capital sum derived from an asset', potentially taxable under s22 Taxation of Chargeable Gains Act 1992.

I don't know enough about the terms of the Existing GBP Notes to comment on whether they constitute QCBs for CGT purposes. Gains on QCBs are not generally taxable, except in certain circumstances such as on a 'conversion of securities' (for instance, sale of company shares in return for loan notes, where a gain on disposal of the shares can be rolled over until disposal of the loan notes - see s116(10) TCGA 1992).

As the Existing EUR and SEK Notes are denominated in overseas currencies, they cannot be QCBs.

EISman

Gan020
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Re: Early Voting Fee

#360016

Postby Gan020 » November 25th, 2020, 4:46 pm

HL have classified mine as a "return of capital".

IPF2 is a retail bond trading on ORB and my understanding is that these are QCB.

It is therefore my view that this isn't declarable.

The amount involved for me is also "trivial" but I will probaby declare in the any other comments, not that it matters as it's unlikely I'm going to fill my CGT allowance this year.

genou
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Re: Early Voting Fee

#360036

Postby genou » November 25th, 2020, 5:35 pm

Gan020 wrote:HL have classified mine as a "return of capital".

IPF2 is a retail bond trading on ORB and my understanding is that these are QCB.

It is therefore my view that this isn't declarable.

The amount involved for me is also "trivial" but I will probaby declare in the any other comments, not that it matters as it's unlikely I'm going to fill my CGT allowance this year.


I think Eisman is correct that it is a capital sum derived from an asset, rather than it really being a return of capital. I'm happy that the underlying is a QCB, hence my thinking that it was probably a nothing for tax. There remains the possibility that it is taxable to CGT because the receipt is not from a realisation of the QCB ( and hence not within the exclusion from CGT of a QCB ), but I think that is unlikely. As I say the amounts are trivial, and nobody is going to query it purely on that basis.


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