Action group planned for BES investors
Sunday 30 October 1994
Gordon Leighton and solicitors Brook Blaine Russell & Quinn are teaming up to try and help 4,000 investors in the Gracechurch business expansion scheme, who lost out because the Government banned one of the main tax breaks associated with the BES before shares in the scheme could be successfully issued.
The Gracechurch BES offered investors a 'loan-back' after six months. This guaranteed a return of 14 per cent after just six months' investment in the scheme, which is designed to run for five years. However, the scheme was one of a number caught out when the Chancellor removed tax relief from loan-backs in last year's March Budget.
Although the issue closed weeks before the Budget deadline, shares in the scheme were not deemed to have been properly issued until they were recorded on the share register. This occurred after the Budget deadline had passed.
Investors were not able to benefit from the loan-back and keep their tax relief. Barclays de Zoete Wedd tried but failed to have the ruling overturned in the House of Lords.
Andrew White, a senior accountant at Gordon Leighton, does not believe that Barclays' offer to investors of their money back plus 5 per cent interest is enough compensation. The bank has also offered investors who stay in for the full five years an increased return.
Mr White said: 'This completely fails to address the main point at issue, which was that there were many schemes of similar type around at the time, and that investors have lost out by investing with a company that simply failed to issue the shares in time.'
He said that NatWest was offering BES investors who were caught by the same ruling full compensation. One investor who is aggrieved by his treatment at the hands of Barclays is Jonathan Massing, a corporate financier who invested pounds 10,000 in the scheme.
He said: 'The scheme was being marketed through the bank's branch network.
The major selling point was that you would be able to walk away after six months. The issue closed a long way ahead of the deadline. It was their incompetence that meant that the shares were not issued in time.'
Barclays said investors took the risk that the tax relief could be removed in the Budget.
- 1 Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by police in Ohio park
- 3 Naked free runner captured in breathtaking photographs above London's streets
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by police in Ohio park
Heroin to be prescribed to Canadian addicts by doctors
Audacious North Korean kidnap plot foiled at Paris airport as 'Asian men' attempted to bundle student onto plane
Tower Bridge glass walkway 'smashed' by night-time visitor dropping bottle of beer
Revealed: the case against Bill Cosby – through the stories of his accusers
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
France 'blocks' Russian sailors from boarding a warship
Green Party Caroline Lucas interview: 'We could be on the edge of something very big'
iJobs Money & Business
Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...
£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...
£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...
$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...