There seem to be a number of rights issues being announced at the moment. How does an investor stand if the shares are held in an ISA?
There have indeed been a number of rights issues announced recently, such as RBS, HBOS, Bradford & Bingley and Imperial Tobacco – with the possibility of more to follow. The basic situation is as follows, bearing in mind the annual ISA allowance of £7200. If there are sufficient monies within the ISA to take up the rights then the process is straightforward. If there are not sufficient monies within the ISA and the investor has not yet used their ISA allowance this tax year, they can transfer monies in and use that money to take up the rights (providing their existing ISA manager will allow this). However if the investor has no available monies in the ISA and/or has used up this year’s allowance the only option is to take up the offer outside the ISA. The shares could then be moved into an ISA in a future tax year (using a “Bed & ISA” manoeuvre) up to the ISA allowance for that year. I have recently found a Barclays share certificate stating that I have 78 ordinary shares of 1 each ful
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