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 Qataris pledge to expand Canary Wharf
- 2 #JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
- 3 Women think Irish men are the sexiest, survey finds
- 4 Florida couple forced to register as sex offenders for having sex on public beach
- 5 Watch eerie drone footage of destroyed building in Stalingrad
#JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
Florida couple forced to register as sex offenders for having sex on public beach
UK election candidates: 'Nasty party' Ukip faces fresh questions on eve of vote
Who should I vote for in the general election? Take The Independent's interactive quiz to find out which party's the right choice for you
Ohio 'Shawshank Redemption' fugitive Frank Freshwater arrested after 56 years on the run
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
General Election 2015: Sturgeon claims Scots 'appalled' by Ed Miliband's refusal to work with SNP
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...