London Capital and Finance

Sledger

Sorry for the panic jelli Masonic and others and thanks

sully1311

Jelli wrote: »

lol masonic, I should of checked first before responding.

In total how much do you have tied up in LC&F?

Jelli

sully1311 wrote: »

In total how much do you have tied up in LC&F?

I think exactly it's £62.4k. The ISAs have £26.2k and the mini bonds have the rest

sully1311

I feel for you I really do. I hope it's not all your savings.

Jelli

Thanks sully. Hopefully nothing has been lost.

billyolly

Volkswagen missold cars with the printed advice about emissions and are being chased through the courts to try and get redress.Did LC & F use false advertising about ISAs when people could end up paying tax back on money received?

justme111

The obvious difference is that Volkswagen is a company that is unlikely to fold tomorrow while LCF can disappear very easily according to my understanding

masonic

justme111 wrote: »

The obvious difference is that Volkswagen is a company that is unlikely to fold tomorrow while LCF can disappear very easily according to my understanding

Exactly. The most likely outcome is that LCF will be put into Administration by the FCA investigation and all of its assets will be liquidated and used first to pay the tax on investors' invalid ISA interest to HMRC, then the fees and expenses of the Administrators (which will mount up fast), then anything that is left would be used to repay bondholders.

Bondholders may get some of their money back, but even if all of the LCF loans to other businesses were legitimate they stand to lose a fair chunk of their capital.

Malthusian

HMRC will only be a preferential creditor for withholding tax if LCF goes into administration after April 2020. Otherwise the old rules apply and it will be at the back of the queue with other unsecured creditors. As the FCA investigation will take a long time, this isn't impossible.

The administrator will always be at the head of the queue. So in a post April 2020 administration they still rank ahead of HMRC. Makes no net difference to investors, of course.

Jelli

I know the products are unregulated but does FSCS cover if a regulated company folds and then the money is lost? My limited understanding is they do, and the bonds themselves are irrelevant. I think the danger comes from the borrowers which, if they go out of business and LC&F can't make payments of principal, FSCS doesn't cover.