 LaV - You write "... the SIPP itself is not subject to IHT". But surely that's exactly what it will be from 2027!?
Mike Warburton [well known tax expert] writes in the Daily Telegraph:
"What should we do to prevent our children from having to pay inheritance tax?
Reader Andrew Murray has a question for Mike on the impact of inheritance tax.
Andrew says: “My wife and I’s self-invested personal pensions (Sipps) will (as our Will stands now) be passed equally to our son and daughter. As things are, as far as we know, they will not pay IHT on the money if and until they draw on them, if they don’t, they can pass them on to their children IHT free. Under the new Budget rules, we understand that they will have to pay IHT on all the money they inherit. I am 84 and my wife is 83, what should we do now?”
Mike replies: “Sadly Andrew, your children will probably be left with double taxation. Depending on the value of your other assets your executors will have to pay IHT on the value of your Sipp at death and your children will then have to pay income tax on any amounts drawn. The rules on how this is all supposed to work are absolutely horrendous. I am still working my way through them.” "
Are we at cross purposes? |
pidazzle
Not really discriminatory at all. What I meant was that there is no tax on assets inside a SIPP, so the SIPP is not itself subject to IHT.
If you would look at the current IHT taxation of a life interest in a trust (and SIPPS are probably the largest class of trust now extant), AIM holdings are valued at market value and added pure and simple to the IHT value. Similarly with periodic charges. |
LaV - I don't think C5 suggested there was CGT in a SIPP? Clearly the total value of the SIPP will be liable to IHT, as you say - but, although we have yet to see the whites of the legislation's eyes, I would be amazed if the same 50% discount for AIM stocks held for over 2 years (so = 20% IHT) did not apply equally to SIPPs* as to individuals and any other holder. Surely anything else would be gratuitously discriminatory.
-- *and indeed to all pension funds, although many aren't permitted to hold AIM stocks anyway.
C5 - please can you explain what is a PLU - people like us?? On my calculations the entitlement should be approx 3.4% = roughly 1 for 29: that's assuming all shareholders other than OI will be treated equally, though I'm aware that some have suggested otherwise. |
C5
There is no CGT in a SIPP, nor any other tax. The total value of the SIPP will be liable to IHT, regardless of what is in it.
I actually think they should have gone the whole hog and introduced CGT on death, subject to the usual reliefs on primary residence etc, and abolished IHT entirely. |
Assumptions:-
1. Share price depressed by thought of shares available at 35p. Most of these go to O I. PLU's will only be offered 1 for existing 20. 2. Systems contracts are priced at 25 to 30 % margin after ALL costs, including generous slice of company overheads. Kuwait allows for $13 for O I content. This is a luxury for Kuwait but it is meant to impress Saudi neighbours. 3. $40 million of Kuwait covers 10 year maintenance which leaves 25% of $160 going straight to bottom line, over two years. 4. Bahrain, Saudi and Indonesia only waiting for final signature.
Interesting recent Budget question:-
AIM stock held for two years will now pay IHT at 20%.
Pension value for death after age 75 becomes part of inheritance and higher values charged at 40%.
How are AIM shares held in SIPP at death after age 75 charged for IHT? 20% or 40%? |
I thought they would be issuing the paperwork promptly. For an EGM, which they will need to call, there has to be a minimum of 14 days plus (at least) the day of notice (if by website) and the day of the meeting. So if they call it tomorrow, the earliest it can be is 20th November. |
OI will know way more than the brokers: they’re more likely to be influencing what the brokers say. I don’t think there is any way of guessing margins or valuation. PE could be within a massive range, because a high margin is combined with high risk as its contracting.
Imo the value is in the moat and any IP and that could lead to a multiple of revenue as a valuation instead of earnings, whatever the broker happens to say.
If any US businesses are looking, they’ll be trying to figure out how much of maritime defence they could own in 10 years, not looking at next years forecast.
I think this is firmly in the area of being valued by the market and external interest. The forecasts might be just reassurance about base value. |
The much awaited broker's note will be analysed in detail by some shareholders, but also by Ocean Infinity, Airbus, Leonardo and others. The margins achieved by the company, and therefore the applied PE, will provide the base for valuing the company. A company earning high margins on contracts merits a high PE. I will be very surprised if the note states the operating margin which SRT applies to its contracts. I believe that SRT recognises that, not only does it have a better system than its potential competitors, but it can deliver results at a much lower cost, because it uses less satellite data. This forecast will be unique because the figures will be based on many known milestones. I also suspect that this forecast will under estimate the eventual results for the year ended June 2025. SRT will want to become known for being the company that over delivers on forecasts, rather than the other way around!! I am assuming that every cost has been accounted for in pricing contracts, (management time, flights, hotels, transport, ALL costs over eight years for Kuwait, and including a major slice of overheads. They will then apply a profit margin which goes straight through to the bottom line. I have applied 25% margin to give a year end forecast of between £25 and £35 million. Obviously there are unknowns, especially on the transceivers side of the business. I suspect that OEM sales might have been a little slower because boat sales might have been weaker due to the global recession. On the other hand EMTRAK sales may well have compensated, especially in the US where we have a good sales rep. DAS has very good margins and large orders will surely come but timing is unknown. NEXUS sales are much anticipated, but sales, as yet, are an unknown. AIS components are now readily available with reduced prices. However, SRT raised prices when there was a global shortage and I suspect that the higher sale prices have been retained, resulting in higher margins. I believe that when these figures are researched the market will award the company a forward PE of at least 20. This is a fast expanding company in a high tech industry which is clearly a global leader in its field with the Warren Buffet 'economic moat'. Don't under estimate your SRT shares!! I am also assuming that the company will be able to increase its margins on future contracts. |
AE. Why don't you speak to Cavendish and inquire if your allocation of shares can be placed where you have cash? I suspect that will be the case but others on this board would value hearing what he said.
I imagine that in the next few days Cavendish and Mr T will decide where and how to allocate the 7.5 million shares at 35p. If one assumes about 1 share for every 25 held, they could approach all of the major shareholders (including Ocean infinity?) and ask if they want their allocation and also ask if they would like a few more if some are not allocated. I suspect that holdings of less than 100,000 shares would be considered too small for the administration involved.
Bottom line is that Mr T and Cavendish make the decisions and no one else will learn the final allocations.
I suspect that Bahrain, Saudi and Indonesia will be up and running by the time that the fundraising process is completed. We will then have the much awaited brokers note giving very firm figures for the December half year and the June 2025 year end. We know that Indonesia and Saudi are ready to deliver early and substantial mile stones, including high margin data centres, hopefully well in time for the December figures. If Kuwait data centres can be delivered before June there will be some eye popping figures in the forecast (£25 to £35 million pbt?) £350 million market cap?
PS. METS Amsterdam November 19 to 21 |
No doubt from pulling his hair in frustration ' I can relate!
Hopefully , he'll be sporting a bouffant growth again soon.
'Turkey', though...hmmm!
Don't they have a long coastline..and some 'challenging' neighbours?
Maybe a visit there would be on shareholder-related matters!
GLA |
Good picture owenski, thank you.
My only concern is does Simon need a trip to Turkey soon as the barnet is looking a tad thin on top in that picture. I’m concerned. |
From the gallery - |
Hi CliffPeat,
You're quite right! while checking back, I came across this further description
Brucie bonus : report includes a 7:36 minute interview with frontman Plunkett that describes OI's activities in some detail.
[I was indulging my inner armchair general (or rather admiral?)and went down the 'submarine' rabbit hole thinking of SRT's Philippine/Indonesian coast guard requirements; AUKUS overlap (Western confrontation with China and its 9-dotted-lines South China sea policy; the associated expansion of Australia's nuclear submarine capability; and Kuwait's/the GCC's interest in the Straits of Hormuz chokepoint].
It's worth noting that your link includes a description of OI's capabilities in EEZ mapping (useful for SRT) and also its 'dual use' potential eg in surveying undersea telecomms cables and provision of what it coyly refers to as 'UXO services', to wit 'a full range of identification, clearance and disposal services alongside trusted partners'...
I'm sure OI is very tapped in to the seat(s) of power and will hopefully be a more active lobbyist for SRT than HMG has (apparently) been.
ATB |
Thanks for pointing this out @Extrader.
I had missed the reference - and without knowing the cost and number of USV s one wonders what share of the contract will benefit OI. No doubt it will be a good reference site for them.
btw USV in this context I believe refers to "uncrewed (or unmanned)- surface vessel"
"Smaller uncrewed vessels
We operate our own fleet of smaller uncrewed [surface] vehicles/[vessels] (USVs) capable of operation as standalone units or as force multipliers from Armada ships or conventional ships."
[So possibly "submarine" or "surface"?]
(scroll down)
This may be a small detail - or it may be an important additional string to SRT's bow. And SRT acting as a "channel to market" for OI. |
Hi CliffPeat
The RNS refers to USVs, which I take to be 'unmanned submarine vessels' ie the craft that OI specialise in.
AIUI
HTH |
If you are max’d out on your ISA you can always request that any allocation you are given in an ISA account be made available in a trading account instead, that is if you have a trading account alongside your ISA. I have done this a few times with various shares in the past. It means that you do not necessarily have to sell something in the ISA to fund the purchasee. it does of course mean you don’t get the ISA protection |
I do hope Simon T is reading this. He has always been keen to point out that SRT belongs to its shareholders, at least for the time being. In that case treating each of us fairly and equitably ought to be high on his moral agenda. |
Agreed LaValmy, it's not a retail offer. |
It is not a retail offer but a placing. As I mentioned before I suspect that certain shareholders may well be favoured rather than it being based equitably on the number of shares currently held. The number of shares truly available is likely to be small and the current discount a rather large 20%.
It makes AE's conundrum even worse in that how many shares can you sell to get cash for the placing, certain in the knowledge that you will get them back? Not many is my guess. I also don't think many will get shares in the placing and sell them on the market for a quick profit, so not much chance of getting them back that way either.
Being abroad, I will probably be excluded anyway, though I do actually have some in a SIPP. |
I can site a number of Retail Offers that have raised a fraction of their expected numbers, I'm not saying it will be the same for SRT but definitely a risk so very good that it's only a retail offer of GBP 2.5m
IXICO plc is pleased to announce a retail offer via the Bookbuild platform (the "Retail Offer") of up to 2,631,578 new ordinary shares
IXI - following the closing of the Retail Offer on the BookBuild platform on 14 October 2024, 516,244 New Ordinary Shares will be issued at the Issue Price of 9.5 pence per Retail Offer Share in connection with the Retail Offer, raising an additional £49,043.
CREO £5m Retail Offer, up to 20,833,333 new Ordinary Shares
- closing of the Retail Offer by BookBuild earlier today, 369,109 Retail Offer Shares will be issued at an Issue Price of 24 pence |
@Countryman5 Thank you for link
The Twitter/X translation includes a reference to "develop marine boats"
"Comprehensive development of the maritime security system in the General Administration of Coast Guard
His Excellency Sheikh Fahad Al Yousef signs two contracts with the UAE government and the British company SRT to develop marine boats and the radar system at the General Directorate of Coast Guard"
I suspect that the translation is at fault - but in view of OI activities I wonder if autonomous "marine boats" is actually what they meant. |
A fully subscribed and fully invested ISA isn’t a very good strategy really at any time. |
Mr Tucker, pen in hand.
hxxps://x.com/moi_kuw/status/1851621220673790149?s=46&t=jITv-M5Ey5F_aYnu1Mt0Rg |
This placing creates a dilemma insofar as one will need to have available funds in the same account as one's existing holding. If that happens to be an ISA which has been fully subscribed for in the current tax year, then it isn't possible to add new cash. To take up one's allocation would require the sale of another holding.
In the case of very large holdings, the size of the placing allocation may stretch the ability to make enough free cash available which may result in a lower take up. Conversely, the discount offered may prove too tempting resulting in a fully subscribed take up.
We can only wait and see. |
ftt
I think OI insisted that they get to an effective blocking minority which they will do with their combined shares and warrants at no premium.
As regards other shareholders, placings have always been offered to a select few shareholders, Persey et al, who also get to vote on whether pre-emtion rights can be disapplied. Of course they have always voted in favour of this because they know it will not apply to them (in the next placing). This time, the disapplication will have to be approved before OI's shares are issued as there is insufficient headroom from the last resolution.
Persey et al must have been squared with that. But whether that includes assurances that they will be able to top up as much as they want from the 7.5 million to be available to existing shareholders remains to be seen. |
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