Investors in the failed Woodford Equity Income Fund can expect to receive a share of £185.7m from tomorrow, the latest update to the scheme reveals.
Link Fund Solutions Ltd confirms it has made an initial settlement account distribution of £185,717,355.72 to the Woodford Equity Income Fund (WEIF).
This will be made to registered shareholders tomorrow (Thursday 28 March), and in the same way as previous capital distributions.
However, for those who invested via an intermediary, such as through an investment platform, you’ll need to wait a little longer for the payment to be processed.
But this update on the payment comes earlier than anticipated, as investors were previously told to expect a first distribution in early April 2024.
When it comes to the tax treatment of the payment, distributions are deemed to be a “part-disposal of your shares in the fund for Capital Gains Tax purposes and may, depending on your personal circumstance, give rise to a Capital Gains Tax liability on any gain, or give rise to a tax loss,” the FAQs explain.
Link added that, for any scheme creditor who is unsure of how payments will be treated, they should seek independent advice.
LFSL confirmed it has also established a reserve fund to enable it to meet liability “that did not form part of the scheme”. This stands at £46.5m.
FOUR-YEAR JOURNEY FOR FAILED INVESTORS
Former star fund manager Neil Woodford’s flagship £3.6bn fund was suspended on 3 June 2019 after a surge in redemption requests that couldn’t be readily met following a period of poor performance.
In October 2019, the fund’s administrators confirmed the fund would be wound up, with cash expected to be returned to investors “as soon as possible”.
But a number of requirements have had to be met, including the sale of Link Group’s Fund Solutions business to the Waystone Group, which completed in October 2023.
For the scheme to stand a chance of being approved, it required the support of a majority in number, representing at least 75% in value.
Indeed, the votes garnered smashed through the necessary threshold, with 93.7% voting in favour of the redress scheme, representing 96.1% in value.
The scheme was then sanctioned by the High Court.
To date, £2.56bn has already been distributed to investors. LFSL said it will provide further updates in respect to payments on the LF Equity Income Fund settlement scheme page.
