Keydata Update for Category 2 Investors

23rd December 2009

Early in the New Year, the FSCS will write to Keydata customers who invested in Category Two products to explain how they may make their claims for compensation.

The FSCS is finalising the details of a process with HM Revenue and Customs (HMRC) and PricewaterhouseCoopers (the Administrators) whereby it will pay compensation that is due to eligible Category Two investors directly to HMRC on an annual basis. Where the FSCS pays compensation directly to HMRC on a claimant’s behalf, the claimant will not be required to pay income tax to HMRC themselves in respect of their Keydata Category Two investments which were incorrectly sold to them as ISA-qualifying.

The FSCS and HMRC have devised this process in order to minimise the administrative burden for all parties, especially Keydata customers. It will enable the FSCS to pay compensation that is due in the most efficient way. The FSCS will be writing to those Keydata customers who are affected as soon as the compensation process has been finalised, which we anticipate will be early in 2010.

Background to ‘Category Two’ investments

Category Two investments are ISA investments in the following products:

More information

The FSCS has compiled a list of

Frequently Asked Questions

which you may find helpful.

The FSCS previously issued a Keydata update on 13 November 2009

Tax guidance for Keydata investors from HMRC

HMRC has published details of the tax implications for Keydata investors. This information can be found on HMRC’s website

The Administrators' website

For further details about the Administrators' work, including a comprehensive list of Keydata products affected by the ISA issues, please refer to www.pwc.co.uk/KIS.