The government has bent HMRC rules to allow investors in Lifemark and Hometrak-backed Keydata products to put an amount equal to their original investments back into an ISA and regain their tax exemptions.
Investors had feared ISA tax exemptions would be restricted to the amount of any compensation they receive from the FSCS, which could be less than their original capital.
As a result of the change all ISA investors with Keydata products will now be treated in the same way as those who held products backed by SLS Capital.
ISA investors holding products backed by SLS Capital S.A., Lifemark S.A. and Hometrak S.A. via an ISA manager other than Keydata will benefit in the same way, according to the latest bulletin from HMRC.
The new ISA rule will allow investors to invest into an ISA any amount up to the total originally invested, whether by annual subscriptions or a transfer from another ISA, in the SLS Capital S.A., Lifemark S.A. or Hometrak S.A. products.
Reinvestment will need to be made in a single transaction and by a date that is still to be decided. Currently 5 April 2012 is being considered.
Investors will need a certificate confirming the amount of their original investment from the Administrators of Keydata or their ISA manager to allow reinvestment.
The certificate must be given to the ISA manager receiving the reinvested funds.
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