Upheld: irresponsible administration of corporate action; failure to properly record client instruction; loss of ISA tax wrapper; delayed payment of proceeds complaint against IG Trading and Investments Limited
Financial Ombudsman decision DRN-6401280 of 2026-06-05T00:00:00+00:00. irresponsible administration of corporate action; failure to properly record client instruction; loss of ISA tax wrapper; delayed payment of proceeds complaint against IG Trading and Investments Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6401280 |
|---|---|
| Decision date | 2026-06-05T00:00:00+00:00 |
| Firm | IG Trading and Investments Limited |
| Product | Investment |
| Claim type | irresponsible administration of corporate action; failure to properly record client instruction; loss of ISA tax wrapper; delayed payment of proceeds |
| Outcome | Upheld |
| Remedy | IG Trading and Investments Limited must pay Mr B £3,600 within 28 calendar days, comprising: (1) £1,229.62 for CGT on the sale of shares; (2) £121.04 interest for delay in receiving £6,498.09 proceeds (85 days at 8% simple interest from 28 June to 20 September 2024); (3) £1,621.15 for loss of ISA allowance calculated over 10 years using standard FOS assumptions (£980.70 CGT on capital growth and £640.45 dividend tax); (4) £500 for distress and inconvenience. If not paid within 28 days, 8% simple interest per year applies to the £3,600 from the deadline to settlement date. |
Summary
Mr B held shares in a stocks and shares ISA and accepted a tender offer in December 2023. When the offer was suspended and reconfirmed in June 2024, IG failed to properly record his acceptance, resulting in the shares being delisted and automatically transferred to his general investment account with a £0 value. Mr B subsequently received £6,498.09 from the mandatory tender offer in September 2024, but incurred capital gains tax liability and lost the benefit of the ISA tax wrapper. The ombudsman upheld the complaint and ordered IG to pay £3,600 comprising: CGT reimbursement of £1,229.62, interest of £121.04 for delayed receipt of proceeds, £1,621.15 for calculated loss of ISA allowance over 10 years using standard FOS assumptions, and £500 for distress and inconvenience. The ombudsman rejected Mr B's arguments for more complex calculations and longer timeframes as introducing disproportionate complexity.
The Ombudsman's reasoning
The ombudsman found IG clearly caused the error and the focus was on putting things right. For CGT, the ombudsman rejected the assumption of £0 cost basis and required calculation based on actual profit at 20% rate plus 8% simple interest. For the delayed proceeds, 8% simple interest was awarded from 28 June 2024 to 20 September 2024 as a compensatory rate for deprivation of use. For loss of ISA allowance, the ombudsman applied standard FOS assumptions: 10-year timeframe, 5% capital growth, 2.5% dividend distributions, 24% CGT rate, and 39.35% dividend tax rate, rejecting Mr B's arguments for longer timeframes, higher growth rates, and compound dividend reinvestment as introducing disproportionate complexity. The ombudsman rejected Mr B's mathematical approach in favour of a qualitative, holistic approach appropriate to the informal nature of the FOS. For distress and inconvenience, £500 was awarded, noting Mr B's pre-existing circumstances but declining to award additional compensation for time spent complaining or collating evidence.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| IG Trading and Investments Limited, all decisions | 13 | 38% |
| Investment, all decisions | 13,970 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website