Correction to my previous post. ISA shares can qualify I now understand. Cavendish making a good effort. |
others may find this link useful in contacting Cavendish. |
AE and others. If you are looking for shares at 35 p and your holdings are in SIPP or ISA, where you cannot fund purchase but have cash elsewhere, I suggest that you write to Cavendish FAO of Jonny Franklin-Adams and explain your total holding and where the cash will be available. He will probably be grateful. |
I suppose the geopolitical situation has become murkier still, which I imagine will have an impact on SRT in certain countries.
Expecting the US to pay for anything in the Philippines would seem to be out. Tariffs against China may well be balanced by a laissez-faire attitude on the nine-dash-line, except if it impinges on chip supply from Taiwan - who may have to pay up for protection.
Longer term, I see some decoupling by traditional US allies both in Europe and Asia as they see the need to reinvigorate their own capabilities. That could bode well for SRT in Asia. But conversely, some Asian countries might bow to the inevitable and seek accomodation with China, again the Philippines if a Duterte comes back. Indonesia ploughs its own furrow but might become more active doing so. Vietnam even more so.
As for the ME, well anyone's guess. |
None taken. Trusts are settled by individuals, so most of the tax rules are based upon personal tax rules. As I said you need to look at the rules of the structure, which you have done for trusts. There is no mention of aim to be found under pension legislation because there is no exemption. Pension rules apply to the wrapper - what is underneath the wrapper is irrelevant - it's either an allowable asset or it's not. Anyway I understand you logic, empathise with your frustration and wish you well in your continued investigations. |
 hp: With no disrespect, no the AIM [IHT] rules are not for individuals alone, they also apply to trusts. As a retired tax practitioner, I write from professional knowledge and experience as well as personal. As has been pointed out, pension funds are typically structured as trusts, and certainly have more in common generally with trusts than with limited companies.
Time will tell, but I suspect you're mistaken in suggesting the new AIM/IHT rules won't apply to pension funds. If they did, I firmly believe it would be manifestly inequitable and unjust and that there would be a total outcry. And in any case I can find absolutely no hard evidence that the Government supports your view. If there is any, please show me.
However, by way of belt and braces, I will pick the brains of a friend who is a senior private client partner in a leading firm of accountants. Watch this space.
Edit: I found this -
"Periodic charges
Trustees will have to satisfy the two year ownership period on any business assets within the trust before they qualify for relief. Business relief reduces the value of the business property for the purpose of the ten yearly periodic charge calculation. Therefore, if the only assets in the trust at the ten year anniversary are assets which qualify for 100% business relief, there will be no periodic charge."
Further edit, this time from the horse's mouth: |
pidazzle
I don't want to go too far with this, but if you look at 2.10 in the document you linked you can see the current position, i.e. executors pay the IHT and can recover it from the beneficiary who may not have the funds so may have to draw down on the pension thereby creating an income tax liability for themselves. The paper seems to suggest that they will be doing them a favour by getting the tax directly from the pension/SIPP rather than any unfairness in the potential dual IHT/IT charges. That would seem to be the limit of their generosity. The Treasury will be keen to point out that the funds in a SIPP will have entered with a tax credit (20-40%) rolled up without any tax and that a large portion of the value is due to those tax breaks. And given that the intention was to enable people to provide for their own old age, I wouldn't be surprised if they do not try to go back towards a use-it-or-lose-it model. So I doubt if any concession will be given to any assets held in a SIPP. |
It's what I've done for the last 30 years. You're trying to apply personal tax rules to a pension scheme. Take the example of a private limited company where I am the 100% shareholder. The company doesn't trade, and only holds investments. If it owned, say, 10% in AIM shares there was, and remains, no exemption from IHT for any aim shares owned. The whole investment company would be assessed for IHT purposes.You need to look at the structure and then the tax rules that apply to that Structure.The AIM rules you refer to are for individuals and individuals alone. |
hp #15137 - Your source please? I stand to be corrected, but I have searched through the Govt consultation document
and can find no mention of what you suggest. Furthermore, and obviously, your suggestion would result in pension funds being not merely put on a level footing with the deceased beneficiary, but positively worse off: that would be astonishing. |
Edit: Placing looks like next week and somehow ISA holding seems actually does count. |
I remember the previous rights issue
was around the 12th of January at 35p.
In February I was able to buy many more at 31.4p.
Such seems to be the nature of rights issues - IMO |
You get caught for IHT in the spouses death though |
No IHT though if left to a spouse. |
Guys - whatever is held in the SIPP is subject to IHT wef 2027, depending upon the results of the consultation. Doesn't matter what the assets are including AIM shares.Even assets that will still qualify for a 100% IHT exemption such as shares in a private limited company worth less than £1m will be subject to IHT if held in a pension.Although a pension is a type of trust, the rules are wholly different.Hope this helps. |
LaV - In our exchange at #15121-#15127 we seem to have slightly lost sight of C5's original question at #15120. Namely, if I may rephrase it: Assuming that from 2027 SIPPs and most other pension funds will be subject to IHT calculated on the notional basis that they form part of the deceased's estate (or fall to be added to it, if you prefer), will AIM stocks held within such funds be eligible for the same IHT treatment as those held by e.g. the deceased personally - namely 50% discount (making an IHT charge of up to 20%) provided held for over two years? Would you agree that the answer must surely be yes, given that anything less would discriminate unreasonably against pension funds as compared with other IHT payers?
(Let's not get into whether the proposals are discriminatory in themselves - that's a whole other debate....) |
I’ve had a few more as well, but given the mood of the market and frequent post-placing share price behaviour and results coming, have saved a chunk for 30p. Probably got too many from ages ago so if it doesn’t get down there, so be it. |
AE. Very well said ref. 'Given the relatively small extra'.
Done exactly that during the day as a meaningful amount of shares will not be possible unless you have very large holdings and even then it would be a very small amount by comparison @ 3448 per 100k shares held if at 1 for every 29.
This thought process certainly made me bite the bullet and increase my holding before the details are released, as we may see more buying action then as investors realise the small amounts they can apply for at 35p will not amount to much.
You can still also apply for your fair share when the time comes but you wont need to rely too much on it, so it can be regarded as a little top up perhaps. |
AE
As pidazzle pointed out, it would be about 1 new share per 29 existing if done pro rata, so small regardless of any preferential treatment.
But when you really think about it, £7.5 million is small compared to any reasonable estimate of what the peak working capital outflow might be on this Kuwait contract (excluding the bond). I suspect that they think that the cash inflows from the other two can cover the difference. Remember that they expect also to cover some of the bond in six months from their own resources. UKEF generally cover 80%, so that would be some $4 million.
In whatever document they produce for this, some of this may be made clearer. I suspect not as much as usual, until the results are out and even then the broker seems to want to wait until the other contracts have the green light before issuing forecasts. I suppose they might be hoping for those green lights before 2nd December? |
I tried doing what C5 suggested and rang Cavendish to ask some questions about the mechanics of this fund raise. I asked to speak to Johnny Franklin Adams who I think is the man dealing with it. I was told he wasn't answering his phone and was offered a call back. I haven't yet had that.
Given the relatively small extra, I think buying in the market may be a better bet as you have at the very least, the ability to decide how many shares you want to buy. If we do see a rerating in due course a few extra pence now will pale into insignificance.
The question of which account to use doesn't arise for me as I have very little not in an ISA. For the moment, CGT doesn't have to be factored in but I don't trust this Government to leave it that way if they find they need yet more to fund the unproductive public services, their pensions and powerful union members. |
Trouble is that being sophisticated nowadays just involves pressing a buy button. |
When is the placing going to take place? I suspect that folks will have to react quickly following a RNS which will give details of how to take part. I also suspect that the majority of the shares will end up in 'sophisticated investors hands. |
I think I’ll retrain as a finacial adviser. Kerching! |
pidazzle
No I don't mean that they will not tax it. If they follow the life interest model, the SIPP would have to bear the IHT charged on the asset value, despite its legal status as a discretionary trust. |
LaV - you are of course right that SIPPs do not form part of your estate in the sense that they can't be bequeathed by will. But that doesn't mean that the Govt can't seek to charge IHT on them on your death, although implementation of that is clearly going to be complicated.
At all events the general view seems to be that, while SIPPs don't form part of your estate now, they will do so (at least for IHT purposes) - or perhaps, will be deemed to do so - from 2027. See e.g. this discussion:
I fully accept that we are in a consultation phase and, therefore, that it may never happen (or at least not in the form envisaged): but that is the perceived reading of what is intended.
Edit. Have seen the edit note in your last posting, and am now confused as to whether or not we are still at cross purposes. Are you still suggesting that the SIPP won't (as the Budget suggests) be subject to IHT on the beneficiary's death? |
Mike should have said 'sadly Andrew it doesn't matter what it says in your will, your SIPP does not form part of your estate.'
I don't know what rules your expert is allegedly working through as there aren't any. It is in a consultation phase.
Edit. I saw your added comment. The value of the SIPP will be added to your estate. The SIPP itself will not form part of it. |
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