Santander rights issue

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Maxchris
Maxchris Posts: 3 Newbie
in Savings & investments
Can anyone explain please in easy to understand English what the implications are of the Santander rights issue? Like millions of others I received a very difficult to understand letter from Santander about this. Does any one know what the options are likely to be after 'the cheque' is received and what the likely implications are of the rights issue on share price, capital gains (either Spanish or UK) - the letter is indicating that the value of the rights need to be registered for Spanish capital gains.
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  • antrobus
    antrobus Posts: 17,386 Forumite
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    As far as I understand it; you can't opt to subscribe for the rights issue, your only option is to allow the rights to be sold and wait for the cheque.

    In the UK, we have a CGT allowance of £11,300. So for most people the gain will not be taxable.

    As far as I can see, there is no similar CGT allowance in Spain, capital gains are treated as savings income, and it's 19% on anything under EUR 6,000. And it seems it applies to any non-resident who holds Spanish assets.

    I don't know whether Santander will deduct this themselves or not. If you have to register with the Spanish HMRC to pay the tax due, I'd be inclined to give it a miss, and let them chase me. They may not bother chasing thousands of UK residents for 20 euros a pop. But then, I have no idea as to how the Spanish tax authorities operate.
  • pinkcloud
    pinkcloud Posts: 231 Forumite
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    Is it worth exercising your rights and purchasing the shares?

    pinkcloud
  • alanq
    alanq Posts: 4,216 Forumite
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    pinkcloud wrote: »
    Is it worth exercising your rights and purchasing the shares?
    As antrobus wrote, UK shareholders will not be given the option to exercise rights.

    http://www.telegraph.co.uk/investing/shares/santander-rights-issue-everything-shareholders-need-know/
  • pinkcloud
    pinkcloud Posts: 231 Forumite
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    I asked the question because my letter says I can exercise my rights and buy the shares, sell the rights myself or do nothing and my rights will be sold automatically and I will get any proceeds.

    pinkcloud
  • Maxchris
    Maxchris Posts: 3 Newbie
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    many thanks for the article - this makes it clear.
    Do you have any views about the capital gainns tax situation?
  • notbritishgas
    notbritishgas Posts: 2,304 Forumite
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    pinkcloud wrote: »
    I asked the question because my letter says I can exercise my rights and buy the shares, sell the rights myself or do nothing and my rights will be sold automatically and I will get any proceeds.

    pinkcloud
    My shares are held in my XO nominee account and I received a letter from XO, not Santander, saying I had been allocated 10 shares ( only just over 100 held) and could purchase them at something like £4.85 a share. No mention of getting a payment if not taken up.
  • brewerdave
    brewerdave Posts: 8,508 Forumite
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    I hold a handful of Santander shares in an HL ISA account.
    HL tell me that I have 3 choices - a) purchase 20 shares @ a cost of 97 euros, b) sell the rights by phoning them with a flat rate cost of £10 or c) do nothing and HL will attempt to sell the rights for £10.
    If the sale price of the rights is less than £10 then the rights will just lapse.
    I'm leaning towards taking up the rights as I'm holding a bit of cash currently in the ISA - but really not sure if its worth it.
  • pinkcloud
    pinkcloud Posts: 231 Forumite
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    Yes and that is what I was saying.

    I think I too will take them up but it's probably a silly thing to do as mine have lost over 60% in value since I've had them.

    pinkcloud
  • brewerdave
    brewerdave Posts: 8,508 Forumite
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    pinkcloud wrote: »
    Yes and that is what I was saying.

    I think I too will take them up but it's probably a silly thing to do as mine have lost over 60% in value since I've had them.

    pinkcloud

    Lost a lot more than that compared with the "value" of the parent Abbey National shares I originally had - I reckon nearly 400% from their peak value ! Just never got round to selling after I put them in PEP (as I think it was then). Fortunately its my 2nd worse performing investment (not as bad as the Lloyds shares I have:()
  • pinkcloud
    pinkcloud Posts: 231 Forumite
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    I have Lloyds too, lots of them unfortunately.

    pinkcloud
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