By ADRIAN LOWCOCK 25/08/2009
Pricewaterhouse Coopers LLP (PWC) was appointed administrators
of Keydata Investment Services (KIS) on Monday 8th June and is working closely with the HM Revenues and Customs (HMRC) on resolving the outstanding issues.
What are the issues?
There are currently two major issues outstanding with regards to Keydata products. The first being that the Keydata Secure Income Bonds I, II & III continue to remain at risk; the underlying assets in these investments are deemed as not being secure and it is believed that the assets have been liquidated. If this is the case then investors are likely to lose out and will need to make a claim via the Financial Services Compensation Scheme (FSCS), once a conclusion has been reached.
The second issue surrounds the tax treatment of ISA investments within a range of Keydata’s products. This uncertainty has resulted in a number of delays in payment of the income, whilst a decision over whether it can be paid gross was reached. PWC has now declared that income will be paid gross. However, these products have been identified as not being eligible for ISAs and therefore investors will need to declare any income paid on their tax returns.
There are no issues with the Cash ISA products or VCTs provided by Keydata. Products where Keydata provided back office support also remain unaffected.
Redemption Payments
Any investor who has made an early redemption or are awaiting a maturity payment have also been affected. When Keydata entered administration, PWC suspended early repayments, because part of this would have been made up out of income and they needed to be sure of the tax situation of these. PWC have confirmed that these early redemption payments are to remain suspended and it is possible investors will have to wait until maturity to reclaim their investments.
How can investors find out more?
PWC are proceeding with a full review of all remaining products and the outstanding issues as a matter of urgency. Due to the complexity of the situation it may take some time to unravel.
For many investors in Keydata products, a lot of patience is required whilst waiting for PWC to determine the status of the product held. Investors should call Keydata directly on 0844 391 3412, who will be able to provide more information about the status of your own investment. Further information is also provided on the PWC website.