Sirius Petroleum : ISA - FAQs

25 Sep 2019

A number of shareholders have asked the Company about the effect the delisting will have on any Sirius shares they hold within an ISA account.

The Company has asked a tax adviser to prepare responses to commonly asked questions for the benefit of the Company. These are set out below in FAQ format.

The FAQs are provided for general information purposes only. They are not intended to constitute tax or other advice and should not be relied on or treated as a substitute for specific advice relevant to a shareholder's specific circumstances. All shareholders should consult their own professional advisers as soon as possible.

1. Whilst Sirius is not listed on AIM can its shares be held within an ISA?

No. Whilst the Company's shares are not listed on AIM they are not eligible to be held within an ISA.

2. What will happen in that case?

ISA managers are required to ensure that the ISAs they manage comply with the relevant tax legislation.

Your ISA manager should contact you (or will have done so already).

Your manager is likely to explain they will have to sell the Sirius shares held in your ISA, or transfer them to you to be held outside an ISA, within 30 calendar days of Sirius ceasing to be listed. As the Company is no longer listed the manager is unlikely to be able to sell the shares so they will transfer them to you to be held outside your ISA.

3. Will Sirius be relisted within the 30 day period referred to above?

The Company is continuing to develop its portfolio and will seek a relisting on AIM as a new applicant (subject to certain transactions previously notified to shareholders completing). Further details can be found here: http://www.siriuspetroleum.com/media-news/proposed-delisting-from-aim However, in any event, it is not expected that relisting will take place within the 30 day period.

4. How will the Sirius shares be treated for tax purposes once they are outside my ISA?

Whilst shares are held in an ISA any income and gains are not taxable (and losses cannot be claimed).

After your Sirius shares are transferred out of your ISA then normal tax rules will apply.

5. What are the tax implications of the shares being transferred to me outside my ISA?

Generally, when the title of an investment in an ISA is transferred from the ISA manager to an investor, the investor is deemed to have sold the investment for a market value sum and immediately reacquired it for the same amount. Any notional gain on the deemed sale is exempt from charge. Any future capital gains (or losses) are calculated by reference to the value of the shares when they left the ISA.

This is the combined effect of regulation 22 and 34 of the Individual Savings Account Regulations 1998.

However, it is not clear how this general tax treatment applies when shares are transferred out of an ISA after a delisting. Shareholders are strongly advised to discuss their personal position with their own tax advisers.

6. When Sirius relists can I put my shares back into the ISA?

When the Company relists on AIM then its shares should be eligible to be included in your ISA account once again. However, it will not be possible to transfer Sirius shares directly back into your ISA account.

This is because ISA managers can take only cash subscriptions (with certain limited exceptions that are not relevant here). If you would like to hold your Sirius shares in your ISA account again you would need to undertake a process known as 'Bed and ISA'.

This would involve selling the Sirius shares held outside your ISA and contributing the proceeds to a stocks and shares ISA (assuming you are able to contribute further funds to an ISA at that point).

You could then use the cash proceeds in your ISA to re-purchase an equivalent number of Sirius shares.

Your ISA manager should be able to explain the 'Bed and ISA' process to you in more detail.

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