Stockland, Kings Arms, Share Offer – FAQs
frequently asked questions
Q. Does Horatio have to sell the Kings Arms to us if we raise enough money?
A. No, they are under no legal obligation to sell the pub to us. However, we have agreed Heads of Terms with Horatio and are proceeding in good faith. We expect to exchange contracts at the end of July and complete by the end of September 2018.
Q. Are joint applications allowed?
A. No, only individuals can apply. If multiple members of a household or family wish to invest, they should each fill out a Share Application Form.
Q. Can I invest on behalf of my children or grandchildren?
A. No. We will only accept applications from people aged 18 or over.
Q. What happens to my shares if I die?
A. On death your shares will form part of your inheritance estate and will be dealt with under the terms of your will. It is possible for the society to hold a nomination form, whereby we are able to distribute up to £5,000 of your shares to a nominated person outside of probate, however any shares over and above this initial £5,000 will have to be resolved in reference to probate. If you would like us to hold a nomination form for you, please make sure you complete the relevant section on Page 3 of the Share Application Form. You may, if you so wish, nominate the society to receive your shares or bequeath your shares to the society in your will.
Q. What are the minimum and maximum investment amounts?
A. The minimum that you can invest is £100 (i.e. one hundred shares at £1.00 each), although we hope that most investors will invest considerably more than the minimum. We have set the maximum level is £50,000, which is half the current legal limit for individual investments in community benefit societies.
Q. What happens to my money if you cannot raise enough funds to reach the minimum target for shares (£260,000)?
A. If insufficient share capital is generated during the share offer we will (a) negotiate with Horatio for an extension to the timescale, and/or (b) extend the share offer period for a further 3 months. Should both of these fail then the share offer shall be deemed to have failed and we shall write to all share applicants and return their money in full.
Q. What happens to my money if you reach the minimum target (£260,000), but the deal falls through before you complete the purchase?
A. If the share offer is successful and we raise sufficient money to proceed, and, for reasons beyond our control, the purchase is then aborted pre-completion, there is a possibility that certain costs will have been incurred, and these costs will be borne by our investors. These costs have been carefully identified and will not exceed £5,470 in total. These pre-completion costs will be shared across our investors and deducted from shareholders funding on a pro-rata basis, and the balance of their investment will be returned promptly.
Q. What happens if the share offer target is reached?
A. If the share offer target of £410,000 is reached we will close the share offer, and we will not accept any further applications.
Q. When will I start receiving interest payments?
A. We will start paying interest as soon as the Society has sufficient surplus funds available, i.e. once we have met our other obligations (such as finance payments and other overheads) and have built up adequate reserves to ensure we can maintain the property. We anticipate this will be four years after the share offer closes, but if we can make earlier payments we will do so.
Q. Can I sell my shares?
A. No, these are withdrawable shares, so you have to apply to the society to withdraw your shares. The statutory asset lock is also in place to ensure that any increase in business value is only used for community benefit.
Q. When can I withdraw my shares?
A. According to the Rules of the Society, shares cannot be withdrawn for at least three years (except in exceptional circumstances such as death or bankruptcy of a member), and then only if the Society has sufficient reserves to do so without jeopardising the business. Our expectation is that in practice it will take four years to build up adequate reserves.
Q. Can I get tax relief on my investment?
A. The government’s tax relief schemes such as EIS and SITR exclude property rental as an eligible business activity, so investment in the Society will not be eligible for tax relief under these schemes. However, the Personal Savings Allowance introduced in April 2016 does mean that interest received is not taxable (up to a certain threshold that is determined by your tax rate). https://www.gov.uk/government/publications/personal-savings-allowance-factsheet/personal-savings-allowance
Q. Who should I speak to if I have any further questions?
A. Please contact:
Andy Kippax (Treasurer) tel 07719 657403.
Peter Maitland (Chairman) tel 07767 690890.
Damian Clay (Vice Chairman) tel 01404 881833
By email: email@example.com.