Isas in defunct market could retain tax-free status

Isas in defunct market could retain tax-free status

HM Revenue and Customs has given an update on how it plans to handle Isas which were listed on a securities exchange that ceased to operate on 18 August 2015.

The GXG Official List and GXG Main Quote markets were designated as recognised stock exchanges, but closed on 18 August 2015.

A plan to sell the exchange to the Channel Islands Stock Exchange has failed and individual companies now have to find an alternative trading platform.

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HMRC stated it understands this may take some time and investments held in an Isa that were listed or traded on the exchanges can continue to be held as Isa qualifying investments until the company joins a new exchange.

If the new exchange is, for HMRC purposes, a recognised stock exchange, the tax office said investments can remain within the Isa.

However, if the new exchange is not a recognised stock exchange, HMRC said the Isa manager must sell the investments, in which case the proceeds can remain in the stocks and shares Isa.

The Isa manager could also transfer them to the investor to be held outside the Isa.

HMRC stated this must be done within 30 days of the company joining the new exchange.

The Danish financial regulator pulled the plug on GXG last month.

GXG began life as Dansk Autoriseret Markedsplads back in 1998. Five years ago it was acquired by Sweden’s GXG Global Exchange Group, with Carl Johan Hogbom, formerly the chief executive of the OMX Stockholm Exchange, becoming chairman.