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Reporting a fund wind-up RRS feed

  • Question

  • Hello,

    I have a fund here in the UK called LF Equity Income (formerly LF Woodford Equity Income) which is being wound up. I have now received the first wind-up payment of £0.59 per unit. How should I show this receipt on the Investment Transactions Account Register and also when the final payment is made - any suggestions please.

    Saturday, February 1, 2020 12:26 PM

Answers

  •   Even with the help of:         http://moneymvps.org/articles/portfolio_columns.aspx   I have never felt comfortable with: Total Annualised Returns or any of the other 7 'TR' columns (covering different periods) available if I customise the 'Portfolio Columns' of my 'Standard (Portfolio) View'. Certainly, your description (para 3) matches my experience in former times.

    The TR issue hasn't bothered me because I operate a Buy & Hold investment strategy; when I do trade it is on the basis of information gleaned from LSE.

    I choose to display: Average cost, Last price, Total quantity, Cost basis, Market value, Price appreciation, Income, Gain and lastly  Symbol  ~ and accept that the Price appreciation and Gain figures are not comparable because different investments have been owned for wildly different periods of time.

    Good luck.

    Teabag 

    I    

    • Marked as answer by Paul862 Sunday, February 2, 2020 8:04 PM
    Sunday, February 2, 2020 7:08 PM

All replies

  • My thought is to enter it as a return of capital (or the UK equivalent) until they report that it is being treated differently. A return of capital would reduce the basis of the shares, so when your final distribution got entered as a Sell, the capital losses/gains would be the correct amount. Make a reminder to come back and Void or Delete that ROC, and replace it with whatever gets reported to the tax folks. If this is an ISA, don't bother revisiting. A ROC followed by a sale seems to accurately describe the events.

    https://www.investorschronicle.co.uk/funds-etfs/2020/01/29/woodford-investors-learn-scale-of-their-losses/


    Saturday, February 1, 2020 3:44 PM
    Moderator
  • Bad luck with Woodford Equity Income.   MS Money hadn't been invented when my old Rolls Royce plc went into receivership so I haven't actually done what you are trying to do.  But, thinking on my feet, this is what I would do:

    In 'Update prices' manually set the unit price (for LF WEI) to 0.00     Then, I would use multiple 'Investment transaction' lines:

    At the time of the £0.59 distribution I would 'Add' exactly however many units you currently hold ~ and on the same date and in the next transaction I would 'Sell' as many units as you originally had ~ and then I would put this note in the memo field "LF Equity Income Liquidation 1" for both transactions.

    Come the second wind-up payment do the same except the note becomes "LF Equity Income Liquidation 2"  ~  and similarly if there is a third payout.

    Ultimately 'Sell' the whole original holding for £0.00 per unit. 

    Then use a 'Report' customised in the 'Text' field to filter for "LF Equity Income"  ~  so that you can see all (or just) the liquidation stages.

    I have never found Money good at working out Capital Gains for UK Tax purposes ~ I always export Reports and then use Excel to do the sums.

    Teabag

    Saturday, February 1, 2020 4:30 PM
  • Cal, thanks for your response. The investment is within a UK ISA. In the interim until the wind-up is complete entering a ROC is great as the money is available to re-invest however the Portfolio Manager total returns reporting is horrendous. If the final payment is a time coming and I prior re-invest the returned capital from the Account Register cash transactions I can't see how I can void/ delete the ROC as you suggest. 

    Teabag's response also has issues which I will give separately.

    Sunday, February 2, 2020 4:49 PM
  • Thanks Teabag for your response. As the investment is in a UK ISA I do not have any CG issues.

    I carried out down to your paragraph 3 which shows I have the ROC available for re-investment, however until the next/ final payment I still have the invesed units at present price £0.2095.

    On the following day I re-entered a buy for the holding at £0.00 per unit and manually updated the price from £0.00 to the £0.2095. All appears well until I look at the various Total Returns report which shows negative gains for TR Yr & TR 3Yr as expected but positive gains for the other TR's which cannot be true. I appreciate that the latest transaction will show a gain but that should only be TR Wk.

    It looks like the program gives no definitive way to treat my experiece and when all the capital is returned I will have to play about with Cal's and your responses to give the best realistic reporting view.

    My thanks to the pair of you. How to mark both as an answer?

    Sunday, February 2, 2020 5:33 PM
  • Whatever you do, the transaction that finally removes the shares would be a Sell.

    I did not follow the reason for the £0.00 per unit buy.

    Sunday, February 2, 2020 6:52 PM
    Moderator
  •   Even with the help of:         http://moneymvps.org/articles/portfolio_columns.aspx   I have never felt comfortable with: Total Annualised Returns or any of the other 7 'TR' columns (covering different periods) available if I customise the 'Portfolio Columns' of my 'Standard (Portfolio) View'. Certainly, your description (para 3) matches my experience in former times.

    The TR issue hasn't bothered me because I operate a Buy & Hold investment strategy; when I do trade it is on the basis of information gleaned from LSE.

    I choose to display: Average cost, Last price, Total quantity, Cost basis, Market value, Price appreciation, Income, Gain and lastly  Symbol  ~ and accept that the Price appreciation and Gain figures are not comparable because different investments have been owned for wildly different periods of time.

    Good luck.

    Teabag 

    I    

    • Marked as answer by Paul862 Sunday, February 2, 2020 8:04 PM
    Sunday, February 2, 2020 7:08 PM