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That's your view. Mine is different.
"Head up Sense , I still think you did a great job here"
LOL
Senseman wasted hours and hours on fighting the takeover deal. He also made numerous wasted visits to London. He did not do a great job at all
SENSEMAN. Just popped back here to catch up on HUR news. How are things with you now? Difficult times are over I hope. Did you ever hear from a certain persons legal team? Or was it all a hoax. I still see him boasting over on Vast and Live unfortunately. Head up Sense , I still think you did a great job here.
You’re welcome, glad to help.
I should have said that this is just my interpretation of the scheme and not advice. I’m not a tax expert but do have some knowledge and experience of these things. Please do read over the pages around that bit of the scheme to be clear for yourself before making any firm tax planning, happy to discuss further if you have questions. If anyone else thinks I have misinterpreted anything then please do post here, I’m open to challenges backed up with a valid source.
I’m glad you don’t have class 1 as I gave up trying to work out the permutations on those from the wording in the scheme!
Best wishes, Corry
Thankyou Corryvreckan1 that was a really useful post for me as it helps me on future potential tax liability from DCU .
I did not elect so i must have the type 2 dcu , future payments i receive from these will not be classed as a dividend income / not liable to income tax which is the Good news
Thanks again Laser
Laserdisc – the section you quote (Section A on page 81) relates to part of the previous payment already made on 21st June. It means that if HUR had not made the ‘supplementary dividend’ payment at that time, i.e. if they had NOT received the proceeds from the April uplift in time to do so, then Prax guaranteed that they would make the payment instead as part of the purchase consideration (that's the "Deferred Consideration Cash Amount" they refer to). As HUR did make that payment in time (the 1.87p element) it is classed as a dividend for income purposes, and the Deferred Consideration Cash Amount is no longer applicable.
All future DCU payments received from Prax, including this month, will be treated as capital and potentially subject to CGT, not as dividends or any other form subject to income tax (per Section B on page 81).
Separately, if you did sell your DCUs via Jenkins then the proceeds from them will be treated as capital as well.
Note that if you elected to receive class 1 DCUs then you will not receive any cash at the end of this month. You will, instead, receive a loan note for the amount to be paid in 6 months time (so still within this tax year). Class 2 DCUs was the default option that gives the cash straight away when due.
Hope that all helps.
Thanks Corryvreckan1 i picked up this para around Page 79 of the Scheme Document
para Deferred Consideration Cash Amount
This amount will be known on the Effective Date but it will be contingent on the Trigger
Event. If the amount is paid as the Deferred Consideration Cash Amount, it will not be a
dividend for tax purposes. It will instead be additional contingent consideration for
Hurricane Shares.
A UK Holder will be treated as making a part disposal of Hurricane Shares on the Effective
Date and the consideration for the disposal is the known amount.
But maybe this reference is to you selling your DCU 'S today and the value you receive goes in calculating your CGT liability .
This para says If the amount is paid as the Deferred Consideration Cash Amount, it will not be a
dividend for tax purposes. I hold class 1 DCU's so if i receive any cash amount end of this month and continue to hold them do you think it will be classed as investment income
DCU's held in a SIPP are not subject to any taxes at all.
Confirmed - DCU payments are potentially subject to CGT, depending on individual's tax circumstances. See Section VIII of the Scheme Document, page 81.
Message for laserdisc on ADV - I think your quote maybe comes from Investopedia? That relates to US companies - IRS is the US Internal Revenue Service. In that article further down states:
"There are several other requirements for qualified dividends:
The dividend must have been paid by a U.S. company or a qualifying foreign company."
Also, I don't think the DCUs are classed as 'interest', they are part of the consideration for the purchase of Hurricane, just delayed, hence 'deferred consideration unit'. My understanding is that payments received are therefore treated as Capital, but I need to check that again.
Funny that. I emailed them over a week ago and surprise surprise I had no reply either.
This is from the Q&A document issued in March:
“Q36 Will we be updated on company actions and direction?
Prax will provide updates via its normal communications channels. Under the DCU Deed Poll, within five Business Days after each Payment Date, the company will provide a statement to the DCU Holders as at the particular Payment Record Date of the amount of the Deferred Payment made on the relevant Payment Date. This will be reconciled once yearly with the annual report published on Companies House. In addition, Prax’s website will be the main channel of communication with all stakeholders. General news will be found in the News section with more specific investors related communications in the Investor Relations section.”
-------
I imagine most PIs have their DCUs held via broker nominee accounts so the statement, which will be issued by the Registrar (Computershare), should come through your usual broker comms channel. The first DCU payment is due by the end of this month so the statement should be sent by end of first week in October. Check the Prax website that week as details may be published there before your broker gets round to updating you.
If you hold your DCUs privately in certificated form then the statement should be sent to the address on your certificate.
Note that Hurricane Energy has been renamed to Prax Upstream Limited (Prax Upstream) so any comms will likely be issued in that name now.
This is an interesting question and one I have thought about myself. I messaged Prax but have had no reply. (not surprised).
There is information on the Prax website. Click on investor relations and then Acquisition of Hurricane Energy PLC read more. Agree the discaimer and then click on DCU holders.
Anyone aware how we will be notified of the DCU payments, except it lands in the account?
Not that I am holding my breath that we will get the payment.
Brent today $92-$93
Chortles heard coming from Prax & HUR HQs
Groans from CA HQ
Hank - I notice my earlier post directed at Kever has been removed. He no doubt complained to the moderator.
Kever - remember people who live in glass houses shouldn't throw stones. If you desisted being down right rude and insulting to other people maybe you wouldn't get the response you do. Insults hurt -don't they ?
Hank
My understanding of the situation is as follows
The prospective payments on the dcu’s from prax are based on the net revenues earned by hur.
An important aspect of this, is whether hur/prax can use its carried forward losses against its future tax liabilities.
Use of these cf losses will require hur/prax to acquire further oil production assets which appears to be Prax’s intention.
To your question…..the credit facilities granted to Prax give them finance to make such acquisitions and therefore will benefit holders of dcu’s to the extent that such acquisitions will facilitate the use of the tax credits.
I do have concerns however
1) I am not expert enough to know if the losses carried forward have a time limit for tax credits
2) The dcu’s have an expiry date in 2026 so any acquisitions would need to have an earnings impact prior to their expiry.
3) I believe that Prax will have a lot of room for shall be say “creative accounting” in calculating future hur revenue.
I would be very surprised if the dcu’s deliver the maximum mentioned in the take over dox.
Is your moronic statement aimed at me?
The only Hurricane Energy shareholder is Prax.
Go read the terms of the takeover and don't be so lazy. For a shareholder of HUR to ask such a question is moronic
How will that new Prax deal affect us?
Ben Lahnstein, Group Chief Financial Officer, Prax, said: “The success of the transaction highlights the confidence our lending groups have in Prax and the depth of our banking and investor relationships. This latest funding has diversified our funding sources and strengthened our balance sheet. It provides us with a solid financial platform from which to execute future M&A activities, and deliver sustainable, profitable growth.”
The new Facility will be used to refinance the maturing five-year term loan tranche from 2018, as well as for strategic acquisitions.
I believe we are due payments approx...
Oct 2023
April 2024
Oct 2024
April 2025
Oct 2026
April 2026
And 'maybe' Oct 2026
How much per share we get on any of these is unknow.
Regardless of the oil price. My understanding was that the payments were capped at something like 6.27p?