HMRC have issued a press release aimed at taxpayers who held ISA’s with Keydata Investment Services Ltd (“Keydata”). The ISA’s sold by the company were not compliant with the law. Keydata was placed into administration in June of this year. Since then, HMRC together with the Financial Services Authority (FSA), the Financial Services Compensation Scheme (FSCS) and the administrators have been seeking to come up with a formula that will ensure that investors do not lose out.
HMRC have now announced that the vast majority of Keydata investors will be fully compensated. This should ensure that taxpayers will not be required to pay tax on their investments with Keydata. HMRC will seek the tax due directly from the company for the period prior to administration whilst the FSCS will pay the tax on behalf of taxpayers for the period since administration.
Taxpayers will be allowed to reinvest in a new ISA without losing any tax-free allowances. No action is required by taxpayers at this time. In due course, affected taxpayers will be contacted by the FSCS with further instructions.