National Grid Rights Issue

Eddie__2

EthicsGradient: Thanks for your comments.  CG67857 seems to confirm your view in a roundabout way.  It says "The `5 per cent test’ continues to offer practical advantages, and you should continue to accept that any case which meets that test can be regarded as small. To further reduce the likelihood of assessments in trivial cases, you may also accept that TCGA92/S122 (2) can apply in cases where the distribution is £3,000 or less - whether or not this amounts to 5 per cent or less of the value of the shares in respect of which it is distributed."  It sounds as if your interpretation is correct, so if the proceeds of sale of rights are under £3,000, even if the capital distribution is over 5%, it can be CGT-free.  TCGA92/S43 says that "The cost of acquiring the rights is added to the cost of acquiring shares", so this applies to buyers of rights, but I do not have a cost of acquiring the rights, only a notional value of the rights when issued, or the value of my rights that I could have sold.   Does the taxman allow me to charge the notional cost of not selling my rights as part of the cost of acquisition?  In which case, what price can I add, the notional £2,3115, the closing price of rights on 5 June or something else?  I doubt it.   Pricewise, I cannot see any incentive to buy rights shares, other than fees and 0.5% levy. On Friday, I could have bought a share for 882.40p or sold my rights for 196.05p each. If nothing changes, on 5 June I could commit to buying an ex-div rights share for 645p on 12 June, by when the price could have changed.  So £6.45 + £1.9605 + £0.3912 dividend lost = £8.8017, which is a saving of 6.6p including 0.5% levy..  Is that enough to take the risk of 7 days' price changes?

Eddie__2

TATJAM said:

If I sell my rights under option 2 will I get  £6.45 or what the rights are selling for on the market i.e. about £2 ? Thanks in advance

£6.45 was the price you have to pay to buy more shares at your discounted price.  The notional price of a right was 231.15p but they have never traded at that price. The rights are trading as NTL Grid NP under the FTSE ticker NGPN.  Its closing price on Friday rose to 196.05p.  

Eddie__2

soulsaver said:

Nosmo_King_2 said:

What are my likely options as my NG shares are held in an ISA and am close to the annual allowance?

If you want to exercise your rights and no room in your ISA, you can take them up unwrapped. You may need a call to your broker - HL does, I noticed in passing.

II told me that rights on ISA shares are treated the same way as ISA dividends, meaning that you can receive dividends into your ISA account even if you have contributed the max.  So if you sold some rights from your ISA account, they would be paid in as cash in your ISA account, available to use to buy shares with, in the same way as an ISA share dividend reinvestment.    

Dandytf

poseidon1 said:

https://www.lemonfool.co.uk/viewtopic.php?f=94&p=665641

OP, you may get  far more informed views and opinions from a dedicated investment forum of like minded investors in bonds and shares such as Lemonfool.

I've found great use from their Calculators, I'll check those forums.
thanks

benny5

Been away on holiday and returned to discover one of these Allocation letters.

With a small holding (Ex EMEB privatisation), my allocation is only 74, just can’t decide which way to jump. The additional cost of the new shares isn’t an issue.

 From what I’ve gathered, reading this post, it doesn’t appear to make much difference whichever option i choose.

Am I right to view it that way?  

Beddie

benny5 said:

Been away on holiday and returned to discover one of these Allocation letters.

With a small holding (Ex EMEB privatisation), my allocation is only 74, just can’t decide which way to jump. The additional cost of the new shares isn’t an issue.

 From what I’ve gathered, reading this post, it doesn’t appear to make much difference whichever option i choose.

Am I right to view it that way?  

Do you want to invest more in the company? If so, take up the allocation, which is what I would do if I was a long term holder of the shares.

Suenos57

Just received my National Grid Rights issue payment this morning for my exercised option which was for  “do nothing”
Does anyone know how these  “Do Nothing” payments were actually calculated?

alco_pop

I'm lost on this one. I'm trading 212, said I wanted to take up the option. But can't see if money was taken, put aside? Looks like nothing happened??

wmb194

alco_pop said:

I'm lost on this one. I'm trading 212, said I wanted to take up the option. But can't see if money was taken, put aside? Looks like nothing happened??

When I gave my instruction to take part on 27/05 the total amount was reserved by way of a, "withdrawal" on that day with the description when clicked on of, "blocked for right issue (NG)."

On 14/06 when the rights shares were received in my account there is a, "deposit." Look for a, "deposit" on c.14/06 and click on it. On mine there's a description that reads, "rights issue executed (NG)."

Unhelpfully, when I look at the history of NG. transactions the purchase of these shares isn't listed... I have the correct total number of shares, though.

Hoenir

Suenos57 said:

Just received my National Grid Rights issue payment this morning for my exercised option which was for  “do nothing”
Does anyone know how these  “Do Nothing” payments were actually calculated?

Nil paid rights not taken up were sold into the open market or picked up by the investment banks underwriting the rights issue.