Downing Planned Exit VCT 2 - G Shares - The Tax Shelter Report
Downing Planned Exit VCT 2 - G Shares - The Tax Shelter Report
Downing Planned Exit VCT 2 - G Shares - The Tax Shelter Report
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PartVII–OfferDetails&Charges<br />
<br />
AdviserCharges,pricingoftheOffersandcommission<br />
CommissionisgenerallynotpermittedtobepaidtoIntermediarieswhoprovideapersonalrecommendationtoUKretailclientson<br />
investments in <strong>VCT</strong>s after 30 December 2012. Instead of commission being paid by the Company, a fee will usually be agreed<br />
betweentheIntermediaryandInvestorfortheadviceandrelatedservices(“AdviserCharge”).Thisfeecaneitherbepaiddirectly<br />
bytheInvestortotheIntermediaryor,ifitisaninitialoneofffee,thepaymentofsuchfeemaybefacilitatedby<strong>Downing</strong><strong>Planned</strong><br />
<strong>Exit</strong><strong>VCT</strong>2.OngoingfeestoIntermediarieswillnotbefacilitatedbytheCompany.IfthepaymentoftheAdviserChargeistobe<br />
facilitatedbytheCompany,thentheInvestorisrequiredtospecifytheamountofthechargeontheApplicationForm(seeBox3).<br />
<strong>The</strong>InvestorwillbeissuedfewerG<strong>Shares</strong>(totheequivalentvalueoftheAdviserCharge)throughthePricingFormulasetout<br />
below.<strong>The</strong>AdviserChargeisinclusiveofVAT,ifapplicable.<br />
<br />
Commission is permitted to be paid to Intermediaries in certain limited situations, such as in respect of executiononly clients<br />
(where no advice orpersonal recommendation has been provided). <strong>The</strong> level of the Promoter’s Fee appliedtoeachInvestor’s<br />
applicationreflectswhetherornotcommissionispayable.<br />
<br />
Promoter’sFee(noIntermediarycommissionpayable)<br />
<strong>Downing</strong>willchargetheCompanyaPromoter’sFeeof3.5%ofthemoniessubscribed,whereitisnotrequiredtopaycommission<br />
toanIntermediary.<br />
<br />
Promoter’sFee(Intermediarycommissionpayable)<br />
<strong>Downing</strong>willchargetheCompanyaPromoter’sFeeof5.5%ofthemoniessubscribed,whereitisrequiredtopaycommissiontoan<br />
Intermediary.OutofitsPromoter’sFees,<strong>Downing</strong>(notInvestors)willberesponsibleforpayingallthecostsoftheOffers,including<br />
initialandtrailcommission(asdescribedundertheparagraphheaded"Commission"below)toIntermediaries(whereapplicable).<br />
<br />
PricingoftheOffers<br />
<strong>The</strong>numberofG<strong>Shares</strong>tobeissuedtoeachApplicantwillbecalculatedbasedonthefollowingPricingFormula(roundeddownto<br />
thenearestwholeGShare):<br />
<br />
NumberofG<strong>Shares</strong> =<br />
<br />
<br />
Amountsubscribed,less:<br />
(i)initialPromoter’sFee 1 ;and(ii)AdviserCharge(ifany)<br />
÷<br />
1 lessanyreductionfortheearlyapplicationsand/orcommissionwaivedbyIntermediaries(whereapplicable)<br />
2 adjustedforanydividendsdeclaredandexdividendbutnotyetpaid,asappropriate<br />
<br />
Illustrativeexamples(basedonasubscriptionundertheOffersof£10,000andaNAVperGShareof£1)<br />
<br />
(i)<br />
(ii)<br />
(iii)<br />
<br />
<br />
(iv)<br />
Promoter’sFee(commissionpayable)5.5%=£550<br />
NumberofG<strong>Shares</strong>=(10,000–550–0)÷1=9,450<br />
<br />
Promoter’sFee(nocommission)3.5%=£350<br />
ExampleAdviserCharge=£225<br />
NumberofG<strong>Shares</strong>=(10,000–350–225)÷1=9,425<br />
<br />
Promoter’sFee(nocommission)3.5%=£350<br />
ExampleAdviserCharge=£400<br />
NumberofG<strong>Shares</strong>=(10,000–350–400)÷1=9,250<br />
<br />
Promoter’sFee(nocommission)applicationreceivedby28February2013*2.5%=£250<br />
ExampleAdviserCharge=nil(feebeingpaiddirectlybyclienttoIntermediaryordirectapplication)<br />
NumberofG<strong>Shares</strong>=(10,000–250–0)÷1=9,750<br />
19<br />
LatestpublishedNAV<br />
perGShare 2<br />
<br />
applicationsreceivedandacceptedby28February2013benefitfroma1%reductioninthePromoter’sFee.<br />
<br />
ItshouldbenotedthattheexampleAdviserChargessetoutabovehavebeenprovidedtoillustratethepricingoftheOffersand<br />
shouldnotbeconsideredasarecommendationastotheappropriatelevelsofAdviserCharges.<br />
<br />
Incometaxreliefisavailableonthetotalamountsubscribed,subjectto<strong>VCT</strong>Rulesandpersonalcircumstances,whichineachof<br />
theaboveexampleswouldbe£3,000(£10,000at30%).<br />
<br />
<strong>The</strong>numberofG<strong>Shares</strong>issuedundertheOfferswillbeaffectedbya“blended”issuecost,becauseApplicantswillhaveadifferent<br />
issue cost attributable to their application forG <strong>Shares</strong> undertheOffers depending upon whethertheir Applicationisreceived<br />
directly,throughanexecutiononlybrokerorthroughanIntermediaryprovidingadvice.<br />
<br />
Commission<br />
CommissionmaybepayablewherethereisanExecutiononlyTransactionandnoadvicehasbeenprovidedbytheIntermediaryto<br />
the Investor or where the Investor is a professional client of the Intermediary. Commission is payable by <strong>Downing</strong> out of its<br />
Promoter’sFee.ThoseIntermediarieswhoarepermittedtoreceivecommissionwillusuallyreceiveaninitialcommissionof2%of<br />
the amount invested by their clients under the Offers. Additionally, provided that the Intermediary continues to act for the<br />
Investor and the Investor continues to be the beneficial owner of the G <strong>Shares</strong>, and subject to applicable regulations, the<br />
Intermediarywillusuallybepaidanannualtrailcommissionof0.25%oftheNetAssetValueoftheirclients'holdingsforthelifeof<br />
thisinvestment(subjecttoacaponthecumulativetrailcommissionof4.5%onthegrossproceedsoftheOffers).Trailcommission<br />
willbepaidannuallyinJune(commencingJune2014basedontheauditedNetAssetValueatthepreceding31January).Boththe<br />
initialandannualtrailcommissionwillbepayableby<strong>Downing</strong>outofitsfees.
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