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    • Maxchris
    • By Maxchris 10th Jul 17, 10:55 AM
    • 3Posts
    • 1Thanks
    Maxchris
    Santander rights issue
    • #1
    • 10th Jul 17, 10:55 AM
    Santander rights issue 10th Jul 17 at 10:55 AM
    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.
Page 1
    • antrobus
    • By antrobus 10th Jul 17, 11:20 AM
    • 14,890 Posts
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    antrobus
    • #2
    • 10th Jul 17, 11:20 AM
    • #2
    • 10th Jul 17, 11:20 AM
    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
    • By pinkcloud 11th Jul 17, 4:27 PM
    • 182 Posts
    • 89 Thanks
    pinkcloud
    • #3
    • 11th Jul 17, 4:27 PM
    Santander Rights Issue
    • #3
    • 11th Jul 17, 4:27 PM
    Is it worth exercising your rights and purchasing the shares?

    pinkcloud
    • alanq
    • By alanq 11th Jul 17, 4:45 PM
    • 3,639 Posts
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    alanq
    • #4
    • 11th Jul 17, 4:45 PM
    • #4
    • 11th Jul 17, 4:45 PM
    Is it worth exercising your rights and purchasing the shares?
    Originally posted by pinkcloud
    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/
    I'm a Board Guide on the Budgeting and Bank Accounts, Savings & Investments, Food Shopping and Over 50s MoneySaving boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com
    • pinkcloud
    • By pinkcloud 11th Jul 17, 5:11 PM
    • 182 Posts
    • 89 Thanks
    pinkcloud
    • #5
    • 11th Jul 17, 5:11 PM
    Santander Rights Issue
    • #5
    • 11th Jul 17, 5:11 PM
    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
    • By Maxchris 11th Jul 17, 5:14 PM
    • 3 Posts
    • 1 Thanks
    Maxchris
    • #6
    • 11th Jul 17, 5:14 PM
    • #6
    • 11th Jul 17, 5:14 PM
    many thanks for the article - this makes it clear.
    Do you have any views about the capital gainns tax situation?
    • notbritishgas
    • By notbritishgas 12th Jul 17, 8:27 AM
    • 2,023 Posts
    • 885 Thanks
    notbritishgas
    • #7
    • 12th Jul 17, 8:27 AM
    • #7
    • 12th Jul 17, 8:27 AM
    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
    Originally posted by 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
    • By brewerdave 12th Jul 17, 9:54 AM
    • 4,356 Posts
    • 1,773 Thanks
    brewerdave
    • #8
    • 12th Jul 17, 9:54 AM
    • #8
    • 12th Jul 17, 9:54 AM
    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
    • By pinkcloud 12th Jul 17, 10:17 AM
    • 182 Posts
    • 89 Thanks
    pinkcloud
    • #9
    • 12th Jul 17, 10:17 AM
    • #9
    • 12th Jul 17, 10:17 AM
    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
    • By brewerdave 12th Jul 17, 10:41 AM
    • 4,356 Posts
    • 1,773 Thanks
    brewerdave
    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
    Originally posted by 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
    • By pinkcloud 12th Jul 17, 10:46 AM
    • 182 Posts
    • 89 Thanks
    pinkcloud
    I have Lloyds too, lots of them unfortunately.

    pinkcloud
    • eskbanker
    • By eskbanker 12th Jul 17, 11:32 AM
    • 4,980 Posts
    • 4,720 Thanks
    eskbanker
    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 !
    Originally posted by brewerdave
    How can you lose more than 100% of the value of a share?! Did you end up owing them four times what you'd paid, or were you spread betting perhaps?
    • clivep
    • By clivep 12th Jul 17, 1:12 PM
    • 113 Posts
    • 30 Thanks
    clivep
    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.
    Originally posted by notbritishgas
    Same here. No mention of getting any payment for lapsed rights.

    I exercised the option on Monday by email as instructed but the trade doesn't appear to have gone through yet.
    • pinkcloud
    • By pinkcloud 12th Jul 17, 3:36 PM
    • 182 Posts
    • 89 Thanks
    pinkcloud
    Here is my letter. Please note the costs are in euros not pounds

    What is happening?

    Banco Santander SA has recently announced details of a Rights Issue giving you the opportunity to buy additional Shares. As you held Banco Santander SA Shares at the close of business on 5 July 2017 in your Stocks & Shares ISA you are entitled to participate in the Rights Issue.

    What are my Options?

    You have been credited with 1 Banco Santander SA Right for every Share held. You now have 3 options to consider and these are explained below in more detail.

    Option 1 - Take up your Rights. The terms of the Rights Issue allow you to buy 1 new Share for every 10 Rights held. The new Shares will cost €4.85 each. You therefore have Rights to purchase up to 21 Shares which would cost € 101.85 to take up in full. You may also apply for Shares in excess of your Basic Entitlement.

    Option 2 – Sell your Rights. You can sell your Rights in the market subject to a special flat rate commission of £10.00. The proceeds will remain in your Account. If you wish to sell your Rights then you may do so by calling us. The deadline to sell your Banco Santander SA Rights is noon Monday 17 July 2017. Please note that although it is expected that a market will continue to exist in the Rights up to this date it cannot be guaranteed. We will only be able to process your sale if there is still a market for the Rights.

    Option 3 - Do nothing. If you do not sell your Rights or take them up by the deadline of noon Monday 17 July 2017 we will attempt to sell your Rights on your behalf to ensure that they do not lapse without value. The sale will be subject to a special flat rate commission of £10.00 and will be placed as a bulk trade which may result in you obtaining a more or less favourable price than if your trade is executed individually. Please note if the sale does not cover the £10.00 commission it will not be executed. The Bulk Sale is expected to be completed from Wednesday 19 July 2017, please note that although it is expected that a market will continue to exist in the Rights up to Wednesday 19 July 2017 it cannot be guaranteed."

    pinkcloud
    • antrobus
    • By antrobus 12th Jul 17, 4:51 PM
    • 14,890 Posts
    • 21,091 Thanks
    antrobus
    Different arrangements apply to the rights issue depending on whether the shares are held through the Santander nominee service or a third party nominee service.

    As far as Spanish tax is concerned however, I don't think there is a difference.

    Santander have produced this guidance note with more detailed info.
    http://www.shareview.co.uk/4/Info/Portfolio/santanderhelp/en/home/Documents/Spanish-Tax-Form-July-2017.pdf

    It seems that you are supposed to;

    - fill in a Form 210
    - get hold of a letter from HMRC confirming that you are a UK resident
    - submit these to the Spanish tax authorities (Delegaci!n de la Agencia Estatal de Administraci!n Tributaria) in order to claim exemption from Spanish tax. I believe it is the case that the double tax treaty exempts UK residents from tax.

    They have detailed instructions on how to fill in a Form 210, and a Pro Forma letter to HMRC requesting the necessary certificate.

    What I don't know is what the Delegaci!n de la Agencia etc will do if you don't take any notice of this ******* rigmarole. There is it seems a €100 fine for not filling in a form 210. But God knows whether they will chase a few thousand UK shareholders for a tax liability that doesn't actually exist for 99% of them.
    • antrobus
    • By antrobus 13th Jul 17, 12:03 PM
    • 14,890 Posts
    • 21,091 Thanks
    antrobus
    According to today's DM, Santander have 1.4 million UK shareholders. That's a lot of people to chase for missing 210 forms.
    • Layna
    • By Layna 14th Jul 17, 10:20 AM
    • 14 Posts
    • 5 Thanks
    Layna
    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.
    Originally posted by brewerdave
    I can't believe HL are charging you to sell the rights and have the nerve to say if the lapsed proceeds are less then £10 they won't pay out!! The rights are about 8p atm... I wonder how many folk will actually get anything...
    • Slinky
    • By Slinky 14th Jul 17, 11:25 AM
    • 4,334 Posts
    • 17,774 Thanks
    Slinky
    How glad am I I got rid of my Santander shares. The flipping withholding tax did my head in when trying to complete my tax return. And all for pennies!
    • jimjames
    • By jimjames 14th Jul 17, 1:22 PM
    • 11,896 Posts
    • 10,278 Thanks
    jimjames
    I can't believe HL are charging you to sell the rights and have the nerve to say if the lapsed proceeds are less then £10 they won't pay out!! The rights are about 8p atm... I wonder how many folk will actually get anything...
    Originally posted by Layna
    Why would they not charge? It's like selling any share, the transaction will cost to process. I can't see it's "the nerve" of not selling under £10. Surely if they were to go ahead and sell regardless we'd have plenty of people on here complaining that they'd got to pay more for the sale than they got back so it will cost them.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Layna
    • By Layna 14th Jul 17, 3:32 PM
    • 14 Posts
    • 5 Thanks
    Layna
    Why would they not charge? It's like selling any share, the transaction will cost to process. I can't see it's "the nerve" of not selling under £10. Surely if they were to go ahead and sell regardless we'd have plenty of people on here complaining that they'd got to pay more for the sale than they got back so it will cost them.
    Originally posted by jimjames
    It's a corporate action, not a normal trade so the costs shouldn't be apply. My provider hasn't charged me a penny to take part or sell rights in any corporate action since I've been with them... I just found it strange HL would....

    Is everyone else charged for rights issues and the like?
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