Micro Focus Share Discussion Threads

[philms] 17/5/2019 17:46

For UK taxpayers the redemption of the B shares is treated as a disposal of those shares and may give rise to a capital gain or loss.Extract from the CircularThe material set out in paragraph A below does not constitute tax advice. Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the United Kingdom should consult an appropriate independent professional tax adviser.1. CAPITAL REORGANISATIONFor the purposes of CGT:• the issue of the B Shares to Shareholders and the Share Capital Consolidation should in practice each be treated as a reorganisation of the Company's share capital. Shareholders in receipt of B Shares and New Ordinary Shares arising from the B Share Scheme should not be treated as making a disposal of their holding of Existing Ordinary Shares and no liability to CGT should arise, in each case by reason of the issue of the B Shares to Shareholders or the Share Capital Consolidation. Instead, the Shareholder's resultant holding of B Shares and New Ordinary Shares should, for CGT purposes, be treated as the same asset and as having been acquired at the same time, and for the same consideration, as the Shareholder's holding of Existing Ordinary Shares;• upon a subsequent disposal (or deemed disposal) of all or part of the Shareholder's B Shares or New Ordinary Shares, a Shareholder's aggregate CGT base cost in such Shareholder's holding of Existing Ordinary Shares should be apportioned between the B Shares and the New Ordinary Shares by reference to their respective values on the first day on which the New Ordinary Shares are listed; and39• the sale, on behalf of relevant Shareholders, of fractional entitlements to New Ordinary Shares resulting from the Share Capital Consolidation (where applicable) should not generally in practice constitute a part disposal for CGT purposes. Instead, the amount of any payment received by the Shareholder will be deducted from the base cost of the New Ordinary Shares for the purposes of computing a chargeable gain or allowable loss on a subsequent disposal. This treatment will not apply if the proceeds are greater than the base cost of the holding of Existing Ordinary Shares. In this event, the Shareholder may elect (in effect) for the excess to be treated as a capital gain and to give up any basis they have in their shares.The issue of the B Shares and the Share Capital Consolidation should not give rise to any liability to United Kingdom income tax (or corporation tax on income) in a Shareholder's hands.2. REDEMPTION OF B SHARESThe redemption of the B Shares should be treated as a disposal of those Shares for United Kingdom tax purposes. This may, subject to the Shareholder's individual circumstances and any available exemption or relief, give rise to a chargeable gain (or allowable loss) for the purposes of CGT.Any gain or loss will be calculated by reference to the difference between the purchase or redemption price and the element of the Shareholder's original base cost in their Existing Ordinary Shares that is attributed to the relevant B Shares. The amount of the base cost which will be attributed to the B Shares will be determined as outlined in Section (A)(1) above.2.1 IndividualsThe amount of CGT, if any, payable by an individual Shareholder as a consequence of the redemption of the B Shares will depend on his or her own personal tax position. Broadly, a Shareholder whose total taxable gains and income in a given year, including any gains made on the redemption of the B Shares and after all allowable deductions "Total Taxable Gains and Income"), are less than or equal to the upper limit of the income tax basic rate band applicable in respect of that tax year (the "Band Limit") (£34,500 for 2018/2019 and £37,500 for 2019/2020) will normally be subject to CGT at a rate of 10 per cent. in respect of any gain arising on the redemption of his B Shares. To the extent that a Shareholder's Total Taxable Gains and Income exceed the Band Limit, capital gains tax will generally be charged at 20 per cent. in respect of the portion of the gain that exceeds the Band Limit.The capital gains tax annual exemption for individuals (which is £11,700 in the 2018/2019 tax year and £12,000 in the 2019/2020 tax year) may be available to exempt any chargeable gain, to the extent that the exemption has not already been utilised.Full Circular available here:-https://investors.microfocus.com/umbraco/Surface/Disclaimer/Accept

[ilovefrogs] 17/5/2019 17:07

A didvidend is a return of value. Hence the ROV is just a big dividend as far as HMRC is concerned and they're right so you have to declare it and pay tax on it if not in an ISA.

[phillis] 17/5/2019 09:52

uganda

I said it reduces your base cost

[woodhawk] 17/5/2019 09:32

Anyone know what the current divi forecast is based on revised number of shares?

[philms] 17/5/2019 09:02

For shares outside SIPP or ISA there could be a capital gain or loss depending on your base cost. Base cost is allocated on the basis of relative value of New Ordinary Shares and B Shares on 30 April, first day of trading of New Ordinary Shares.

[woodhawk] 16/5/2019 17:16

Thx for the advice, no tax implication for me - all ISA or SIPP. IG listed my ROC as a 'dividend' though.

[ugandalad] 16/5/2019 16:54

No your cost should reduce by the same amount as the cash you receive so you havea nil capital gain

[phillis] 16/5/2019 16:31

but presumably affects your base cost for capital gains purposes

[higgins1] 16/5/2019 15:58

Previous post said;

Basically yes but it’s not a dividend since it’s not liable to income tax.
It’s a Return of Capital. It’s like you exchanging some of your shares with the company for cash. You have cash in return for having less shares. It’s a wash.
If you’ve been in MCRO they’ve done it before; it’s a distribution of capital.
Make sure you DO NOT declare it as income on your tax return!

However I note my broker has listed the payment as a dividend!

[woodhawk] 16/5/2019 08:12

What are the tax implications of the ROV in the UK? Luckily, all mine are ISA'd and SIPP'd so not relevant in my particular case, but still interested?

[higgins1] 16/5/2019 07:57

At first I did not think that the Return of Value would be a net positive action, now the dust has settled I have tried to anyalise the situation!

03/04/19 3180 shares @ 20.67 [closing price day before last regular div] = £65730.60
29/04/19 3180 shares @ 19.205 [closing price day before ROV] = £61071.90
30/04/19 2638 shares @ 19.378 [closing price day of ROV] = £51119.16

14/05/19 ROV payment 10562.78

15/05/19 2638 shares @ 18.284 = £48233.19
Add back in ROV 10562.78 + 48233.19 = 58795.97

Worse off than at either 03/04 or 29/04
To be seen what tax advantages there are from ROV share wash compared to straight sell? [I do not live in UK]

If I understand correctly there should now be less shares in circulation which should equate to higher share price in the future, against loss of income from disposal of the SUSE business. ???

Only time will tell!

[soundsplausible] 16/5/2019 07:21

Can someone please explain....for many years when issuing a trading update Micro Focus includes phrases such as -
"Management continues to guide to a constant currency revenue range in respect of its continuing operations, for the full year to 31 October 2019, of minus 4% to minus 6%, compared to the 12 months ended 31 October 2018."
What does the minus bit refer to?

[phillis] 14/5/2019 15:30

So the former Autonomy cfo got 5 years

[uncle andy] 14/5/2019 12:10

Got mine yesterday (interactive investor)

[malcolm caton] 14/5/2019 10:34

Hargreaves Landsdown say should be credited to my account today, fingers crossed

[woodhawk] 14/5/2019 09:47

My SIPP and ISA accounts have been credited as of today by IG Index - was surprised as they are usually very tardy with crediting dividends.

[umitw] 14/5/2019 09:28

Just called AJ Bell, they said it will be another 5 working days before they credit the money into my account. They received it yesterday. Not acceptable really!

[umitw] 14/5/2019 06:22

I don't have a credit for the B shares yet for some reason.

[ugandalad] 13/5/2019 20:17

My post an hour ago seems to have disappeared into cyber space so if this duplicates apologies.

Charles Stanley credited my account with the capital return and the rump too small. At the same time they reduced the cost of my holding by the axact amount of both. So I don't have Damon's issue.

[damonbrooks45] 13/5/2019 19:15

My broker consolidated my new shares to £23.16, I had 1711 at £19.16 average. Now I have 1419

They just paid me the 3.34£ today for the buy back/B shares scheme.

Anyone else got such a high new entry on their new consolidated shares????

Umitw?

[umitw] 13/5/2019 16:40

Market is working to our advantage so far thanks to trumps new tariff war on China !

[umitw] 13/5/2019 15:48

I thought the new share allocation was today, have I got it wrong?

[umitw] 10/5/2019 02:38

It wasn't worth holding this for the capital repayment.Should have sold at 1970, buy back later !

[ugandalad] 08/5/2019 17:50

I did the same yesterday. I was going to wait till the market settled down and I received the cash but as I have just funded my ISA I tossed a coin and "buying now" won. I fully expect the share to bounce around till this exercise is well over. I'm in for the long term.