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How soon Kever?
The Prax deal was not "amoral" at all. It was a good deal for many. You only keep moaning about the bad deal as you lost on your shares. Assuming we get 12.5p isn't it time you told us all how much you are set to lose ? It must be a fair wedge as you keep moaning.
Had you have bought shed loads like me at 6p you would be delighted with the deal but you didn't
corry - thanks, and for replies to all. i know the time it takes. this living through the dcu saga has already further cemented my concrete view that the deal agreed with prax by hur and ca was amoral and negligent.
for any entity to hold another's interest funds for 6-9 months and retain such interest thus depriving the another from that interest is fundamentally amoral, and negligent negotiation. how difficult would it have been to negotiate, in a deal already a free gift to prax, that interest on dcu sums was payable from date of oil sale? would prax have refused the free gift of hur for the price of a lollipop? of course not. my cat would have negotiated that.
the other aspect peeing me off is the dcu isa drivel situation pis are presented with - prax statement are titled 'deferred payment calculation' (ie. deferred payment of agreed sale price). yet as you write(of prax promotional & court docs sales drivel):-
' may also now wish to have a read over page 81. the bi-annual payments are described in there as being a part disposal of the dcus for cgt purposes, i.e. no longer a part disposal of the original hurricane shares, and as the dcus themselves can't be held within an isa...taxable outside may yet prove to be correct...'
the reason brokers may be pivoting from paying funds into isas is because it ain't their cash and they can't be a.rsed to have a fight with hmrc. yet the basics are clear - dcus are neither cgt nor dividends, but are part of the original sale price deal. it is ultimately irrelevant what the limitations of hmrc category and/or regulation limitations are. a supreme court has the power to order governments and/or major institutions to amend /improve it's categories./ regulations/ definitions in order to accede and fall in line with basic principles (indeed that is one of it's primary functions). a properly conducted supreme court hearing would order hmrc to amend/improve it's definitions/ regulations to include and allow to remain within isa umbrella any dcu payment made on account of a sale agreed whilst the share was held under isa umbrella. a competent judge would say - this is basic stuff - i don't give a toss what either your regs or your ****pot arguments are - they are crap so change them - dcus are part of a sale price agreed whilst shs held shares under isa protection - no valid argument exists why part of that sale price should be removed from isa protection.
but brokers, hmrc, hur, prax ca are in this instance s cum looking for easy life so as usual it is poor jack-soap left holding the baby with the problem to solve! i won't be declaring anything to hmrc and will let they come after me before bothering to argue with them. the fundamental question remains - why the eff are pis left holding the baby because all the main players (apart from pis) have protected their interests and a rsses?
only positive - brent grinding higher now at $87. i expect and hope it higher to help us a little as least for 1-2 of
Petethestreet - I think the payments should still be part of your CGT thinking, not income tax, regardless of which account they are paid into. See Part VIII, page 81 of the original scheme document (not the Deed Poll) for more details on how it was analysed there.
I looked at that earlier and it has also thrown out a curious reading of the tax treatment of the DCU payments where the original shares were held in an ISA. It may be why some of the brokers are now getting a bit twitchy. There is a separate thread running from a few days ago on tax treatment and anyone contributing to that thread may also now wish to have a read over page 81. The bi-annual payments are described in there as being a part disposal of the DCUs for CGT purposes, i.e. no longer a part disposal of the original Hurricane shares, and as the DCUs themselves can't be held within an ISA...taxable outside may yet prove to be correct...
I don't have the answer, just flagging it for consideration. To repeat as I have always said - this, and the previous threads, are not tax advice, just individual views from various posters and different brokers on how they are approaching the payments received. The scheme document is also heavily loaded with disclaimers from the beginning, but particularly on page 79, so DYOR applies as per.
HANK13 - final payment could potentially come at end March 2027, for any qualifying sales between 1 July and 31 Dec 2026, unless the full 6.48p is already paid out prior to then. 31 Dec 2026 is the final qualifying Record Date to hold the DCUs for that potential payment, the DCUs would then expire on 31 March 2027 unless already expired due to the full 6.48p earlier.
The figure of 1.77p for matched bargaining represents a notional NPV equivalent of potential future receipts (and the inherent risks involved), not the actual likely receipts themselves. I agree with eskibeatbeater's comment below in that regard, would already expect them to have dropped. Which takes me back to mariog's comment this morning about a sale on 27/2 at 1.17p, not 1.77p - the difference being 0.6p. Coincident that is similar to today's payment?, which you would need to hold the DCU for on 31/12/23 as the seller did, so buying on 27/2/24 would not include the right to today's payment.
Short answer - yes, there is no provision in the scheme for DCU holders to gain any portion of any interest earned by Prax on cash they receive from the sale of the hydrocarbons.
It would be impossible to really quantify it in any case. They could immediately use the cash received for investment in other unrelated projects, and subsequently make available the cash due to DCU holders from other sources at the required time. Nothing in the docs (that I'm aware of) to say they have to set aside and retain the 17.5% straight away on receipt, it's just a liability they have to meet at the due time is my reading.
The FX conversion timing is just administrative, to ensure they have the necessary funds in £ in good time to transfer the money to Computershare for distribution. They have done it slightly earlier this time than in Sept and that was better as the £ strengthened immediately after they got the rate from HSBC, would have been an extra 0.5% or so hit if they had waited.
Corry - just read again yesterday's March Prax calculation statement, covers the end June 23 + end Sept 23 offloads. The FX for the whole sum was performed in March. Does this mean that Prax held our 17.5% for the end June offload for 8-9 months earning interest on it which they retain, and our 17.5% for the end Dept offload for 5-6 months earning interest which they retain? Put another way - does it mean that if things for right for the, that paying DCU cash every 6 months means they can make & retain interest on our 17.5% for up to 9 months eg they get the cash for the start Jan 24 offload but we don't see it till end Sept and they keep all the interest Jan-Sept on our 17/5%?
I guess the 1.77p sale price is for people in a hurry. If we get... 0.9p in Sept 2024, 0.6p in March 2025, 0.6p in Sept 2025, and maybe 0.3p in March 2026 and 0.2p in Sept 2026... 2.6p total. And they aren't outlandish guesstimates.
I'm surprised they're not starting to reduce in value then. Granted people have been selling but surely they must start to devalue else it will be worth selling them off after the next payment date.
How soon Kever?
"Are dcu's really still trading for 1.77?"
Yes still trading at around 1.7p today. Remember this figure is the return yet to come from DCU payments till end of 2026
Money received today into my SIPP
Peter - ??? - but still nothing in Hargreaves accounts. so are you just assuming based on what others report their brokers are doing?
Same here. HL told me that was a capital repayment hence ISA. These are now DCU income payments paid into trading acccount and income taxable.
I invest to make money and with Hur after some trading gains it certainly got difficult towards the end but now blue with whatever is still to come as a bonus
I’ll pass on the goading of the obvious self obsessed individual
GLA
Bidds - was hoping you would say previous DCU was paid into trading account as would at least show Inter Invest consistent and different brokers may interpret differently. That they have pivoted from paying into ISA to paying into trading account increases chance of Hargreaves and other brokers doing similar. Questions - did they say whether or not they would be retrospectively re-routing previous ISA payment into trading account? (one would imagine they would need do so for consistency, though rather difficult if folk have already withdrawn ISA cash ). Did you ask them if they intended doing so? Or to explain why they paid previous DCU payment into ISA? Unlikely you had time to think quickly enough in the circs to do so - just my open questions.
PS. As soon as any Hargreaves client (or any other broker) sees where the DCU payment is paid into, please can they post that info
Previous DCU payment went into the ISA. This one has gone into trading account. Have spoken to II to voice my ‘disappointment’ but don’t hold much hope for them changing the landing point for this payment. They claim they will be fined by HMRC if they pay it into the ISA.
Have lodged a formal complaint to make myself feel a little better!
Mine same as you Sense.
Nothing showing as yet and paid into ISA last time, listed as Return of Capital
Was the same done with previous dcu paymnent. or was that made to your isa? hargreaves paid previous dcu into isa
Interactive Investor
Bidds - which broker?
Am Hargreaves - nothing showing there yet
Credited to my trading account rather than ISA
Not happy!
Looks like interactive investor are setting the right standard by crediting accounts today.
GOOD:- .6p via good production & $85 Brent sees all at 6.9p p.sh. Expected .9p end Sept (3 offloads) sees all at 7.8p p.sh, with another offload in AM tanks & another due end Dec (2 offloads). So 8.4p.sh end Dec 24, 1.5yrs post summer 2023 sale, with 2 yrs left till end 2026 cut-off date.
BAD:- 2.4p in 18 months (1.6p annually) = 3.2p due 2yrs 2025/2026. So 11.6p.p.sh total. Assuming no production fall, stable costs & $85 Brent. But production falling & costs rising. So barring lasting dramatic Brent rise to compensate, 11.6p p.sh will not occur, never mind 12.5p p.sh. Barring Prax/HUR buying producing assets, 10p p.sh more realistic - largely dependant on production not falling off a cliff.
Possible UGLY:- CA half yearly reports almost 50% of it's circa 550 million DCUs sold at significant premium. It was a pre-summer 2023 PI concern that a sweetener private deal may have been agreed that post-sale (after decent interval) Prax would buy CA DCUs at a premium unavailable to other SHs. Has such occurred? Or did CA manage to obtain such premium via clever salesmanship to entity or entities other than Prax. I do not know the answer rather but simply phrase the obvious reasonable man question.
NB. Lest we forget perspective - irrespective of whether DCUs top out at 9p, 10p or miraculously 12.5p p.sh - overwhelming majority of PIs are deeply underwater at much higher SP, with many already drowned
Shock. Less than the 0.007 min expected and no where near the 0.01. Are dcu's really still trading for 1.77?