Member Info for Dret

RNS this morning clarifies the timetable - how they made such a schoolboy error is unbelievable

The circular has an ISA section that states we should be able to continue to hold the shares in an ISA since investment trust status will remain. However, it doesn't address the de-listing point.

The government website

https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#qualifying-investments-for-stocks-and-shares-isas

States:

Shares including shares in an investment trust, are qualifying investments if:

• they’re issued by a company that is incorporated anywhere in the world

• they’re:

• either officially listed on a recognised stock exchange

• or are admitted to trading on a recognised stock exchange in the UK or the EEA

Since the shares will be delisted I cannot see how the shares can still be classed as qualifying investments ? Over the years I have had many shares removed from my ISA when delisted

So I think the circular contains misleading/wrong info. What do others think ?

Also the circular recommends we discuss with our retail platforms - given that HL & II hold 50% plus of the shares why haven't they done on our behalf ?

Well done - I have done likewise and contacted share soc - they simply haven't bothered thinking about the impact on RI's

Why not just sell the remaining assets, distribute and then go into liquidation. There is no reasoning in the RNS

If I lived closer to Edinburgh I would also attend

Yes looks inconsistent to me as well.

Our base price post the suspension and exit from ISAs will be the last trading price - which is likely to be low . I've warned about this before !! I just don't understand why liquidation is necessary to ell the investments - just do it while solvent , distribute virtually all the assets and then liquidate and delist.

Corporate organisations running rough shod over the majority retail investors - accounts show Hargreaves & interactive as a combined 51% holding

Suggest everyone complains to Share Soc and the the Company

Done!

Thanks for highlighting the attractions of Croma, lot of good things - low PE and growth strategy, and on the face of it looks an excellent investment. . However, I'm concerned by :

1) The low ROCE, based on last years accounts it is sub 10%. They say they are buying businesses on 15% - great, but there is no margin for execution risk. They say that excluding the Property this will rise to 40% - but isn't this naive - they are buying the property and tying capital up so it very much needs to be included !

2) If they buy say 5 new businesses a year it won't be long before they become a property company that does security ! Not their skill set. They will also need a very good property manager - costs will rise. Concerns re property ownership was dismissed in the presentation saying if necessary they can borrow against the property - but that wasn't the point - why do they want to own rather than lease - concerning that they didnt seem to understand the point let alone have an answer.

3) An acquisition strategy is fine but you need the capabilities on the Board to execute well, with just the 2 of them they seem very light in this area and don't have any relevant previous experience

So until convinced otherwise I won't be investing - which is a shame since they obviously know the industry very well and have a great opportunity to establish a national brand - but I fear they are going to mess it up since its not their skill set.

I would really appreciate your thoughts on the above . Thanks

Sorry, message doesn't seem to be posting properly

Thanks for highlighting the attractions of Croma, lot of good things - low PE and growth strategy, and on the face of it looks an excellent investment. . However, I'm concerned by :

1) The low ROCE, based on last years accounts it is

Thanks for highlighting the attractions of Croma, lot of good things - low PE and growth strategy, and on the face of it looks an excellent investment. . However, I'm concerned by :

1) The low ROCE, based on last years accounts it is

Hi, forgive me but why is an increase to 38% and an extension for another year good news ? The SP certainly thinks it is !

Thanks

Thanks Matt, AJB also 95%

Hi Matt, that's a good result. Which platform was that through ?

I'm with AJ Bell and they haven't credited the proceeds yet

Agreed, why no dividend and/or return or capital ? Also, why the fixation on on a liquidation ? As i have mentioned before surely it is better to let the directors sell all the remaining investments and then go into liquidation , rather than let the liquidator sell the investments at potentially a fire sale value

Don't forget that the RTW share price will adjust on completion for the issue of the new shares to Arix holders

Agreed.

I don't think the regular retail platforms support trading on the TISE so we are all going to be forced sellers !

What do people make of the news of the delisting from the LSE and admission to TISE ? Thanks

HNY everyone

Yes, i take the point that the liquidation may be "unconventional" to suit the particular circumstances of Dunedin. Presumably the Directors will recognise that retail shareholders form the majority of the shareholder base and will structure the liquidation accordingly.

Now trading ex div which partly explains the lower SP, but still looks good value to me

Hi both,

Delisting can happen at any time, it doesn't require a liquidation. If the Company enters a voluntary liquidation control would pass from the directors to the liquidator and delisting would then be their decision. The significance of a voluntary liquidation is that the shareholders vote for it and the company is solvent - but it is still a liquidation under the control of a liquidator.

To me it would make most sense if the bulk of the assets are distributed while listed and then ,if the liquidation is going to drag on, consider a delisting. If the shares were delisted today the deemed buy/cost price outside of the ISA would be c510, with a potential distribution of around the NAV of 617. So this would be a taxable gain of 20%. The situation would be even worse if some of the distribution was by way of dividend rather than capital. Further the proceeds when received will then be permanently outside of an ISA and will take time to reinvest back into an ISA (£20k annual limit)

The majority of Dunedin's share base is retail investors so the risk of a delisting is a big issue. Of course the problem would be that the institutional shareholders would vote a delisting through since it doesn't impact them, while retail shareholders are notoriously poor at voting.

I have contacted Dunedin to make them aware that the issue of delisting/lost of ISA is an important one for their shareholder base. Might be useful if you both did likewise ! - there is a contact email on the website.

I know there is no mention of a delisting at the moment but i would prefer to make the point now and avoid it, rather than have to fight a vote, which as i say will be problematic with institutional shareholders involved.

Re the tax treatment outside of the ISA, I too have never seen HMRC give guidance on what happens on a delisting. That said their published advice re CGT on unquoted shares is that the value should be what you would expect from an open market sale if one was possible. In which case i really can't see how HMRC can argue against using the value from the very last open market trade before the shares were delisted

Reading the circular, if you opt to convert into HHI shares this is done at the HHI NAV value rather than the lower SP. So why would you do this ? Aren't you better to take the cash and buy HHI in the market ? Or am i missing something ?

Thanks

If they go into liquidation the decision as to whether to delist will be made by the liquidator, not the directors since they have relinquished control.

HI Both,

I am not sure the listing fees are that much. if i use the calculator on the LSE website i only get c £10k

https://www.londonstockexchange.com/raise-finance/equity/how-list-equity/calculating-fees

So I still fail to see why a liquidation would be inthe best option of retail shareholders (is it being driven by the interests of the investment managers and institutional shareholders ?)

Re CGT, on leaving the ISA the cost base is deemed to be the market value on the date of leaving. see IC article below. There is certainly a negative in that if a significant amount it will take quite a few years to reinvest the funds back into an ISA wrapper.

https://www.investorschronicle.co.uk/ideas/2023/05/08/i-own-shares-in-a-delisted-company-do-i-have-to-pay-cgt/

I own shares in a delisted company – do I have to pay CGT?'

What happens to shares if they are removed from an Isa?

May 8, 2023

by Leonora Walters

What is the capital gains tax (CGT) treatment of shares that have been removed from an individual savings account (Isa) due to a delisting, which are then sold? What is the deemed cost?

I hold Allied Minds and another company whose shares delisted last year. These were removed from my Isa when the companies delisted and I now hold them in certificated form. My holdings' value was at a loss when they were in my Isa. So is the cost for CGT purposes the cost when I bought the shares within the Isa, or is it the deemed value when the shares were removed from the Isa? JL

Craig Harman, partner at Perrys Chartered Accountants, says:

The income received from investments held within a stocks and shares Isa such as dividends is free from UK income tax. And investors are not subject to CGT on any gains made from the sale of such investments within Isas.

Although it is possible to invest in a wide range of investments within an Isa, this is subject to certain restrictions. Shares, for example, must be officially listed on a recognised stock exchange, or admitted to trading on a recognised stock exchange in the UK or European Economic Area. If such shares are delisted from a stock exchange they can no longer be held within an Isa and must be transferred to the investor, as has happened in your case.

Under the Isa regulations, when the title to an account investment is transferred from the account manager to the investor, there is a deemed disposal of the shares and a subsequent reacquisition. For CGT purposes, this effectively means that the investor is treated as if they acquired the shares based on the market value at the date of the transfer. This value will form the base cost for any future sale.

If the shares increase in value following the transfer, it will give rise to a gain which is subject to CGT. Equally, if the shares fall in value before a sale this will result in a loss which may be offset against other gains now or in the future.

In your case, the shares were sitting at a loss in your Isa pri