Dormant Assets Act 2022

Securities assets U.K.

14 Transfer of eligible proceeds or distribution to reclaim fund U.K.

(1) This section applies where—

(a) a traded public company transfers to an authorised reclaim fund any dormant eligible proceeds or distribution relating to a share in the company registered in the name of an individual, and

(b) the reclaim fund consents to the transfer.

(2) On the transfer of the eligible proceeds or distribution—

(a) a person to whom the proceeds or distribution is payable immediately before the transfer—

(i) ceases to have any right against the company to payment of the proceeds or distribution, or

(ii) if the person is not the registered shareholder, has no right against the shareholder to payment of the proceeds or distribution, but

(b) that person acquires against the reclaim fund whatever right to payment of the proceeds or distribution the person would have had if the transfer had not happened.

(3) In this section and sections 15 and 16—

• “share” has the meaning given by section 540 of the Companies Act 2006;

• “traded public company” is a public company (within the meaning of section 4(2) of the Companies Act 2006) whose shares are traded on a UK regulated market or a UK multilateral trading facility.

(4) In subsection (3) “UK multilateral trading facility” and “UK regulated market” have the meanings given by paragraph 1 of article 2 of the Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.

Modifications etc. (not altering text)

C1 S. 14 applied (6.6.2022) by 2008 c. 9, s. 39(2)(a) (as substituted by Finance Act 2022 (c. 3), Sch. 6 paras. 2, 6; S.I. 2022/569, reg. 2)

C2 S. 14 applied (6.6.2022) by 1992 c. 12, s. 26A(2)(a) (as substituted by Finance Act 2022 (c. 3), Sch. 6 paras. 1, 6; S.I. 2022/569, reg. 2)

Commencement Information

I1 S. 14 not in force at Royal Assent, see s. 34(3)

I2 S. 14 in force at 6.6.2022 by S.I. 2022/582, reg. 2

15 “Eligible proceeds or distribution” U.K.

(1) In this Act “eligible proceeds or distribution”, in relation to a share in a traded public company registered in the name of an individual, means (subject to subsection (2)) any of the following amounts owing to a person—

(a) an amount owing by virtue of a share in the company being converted into a right to payment of the price of the share at the time it was converted,

(b) an amount owing as a cash distribution attributable to the share, or

(c) an amount owing by virtue of a corporate action in relation to the share for which the company is notified of the consideration,

after the appropriate adjustments have been made for such things as interest due and fees and charges payable.

(2) An amount held in a Lifetime ISA is excluded from subsection (1) if its transfer to an authorised reclaim fund would result in liability to pay a withdrawal charge to HMRC.

(3) In subsection (1)(a) the reference to conversion of a share into a right to payment is a reference to conversion in accordance with—

(a) the company’s articles of association,

(b) any contractual term applicable in relation to the share, or

(c) any other applicable provision authorising or requiring conversion of the share.

(4) In relation to a time after a transfer has been made as mentioned in section 14(1)(a), the adjustments referred to in subsection (1) include those that would fall to be made but for the transfer.

(5) In this section “distribution”, so far as relating to a share in a traded public company, has the meaning given by section 829 of the Companies Act 2006.

Commencement Information

I3 S. 15 not in force at Royal Assent, see s. 34(3)

I4 S. 15 in force at 6.6.2022 by S.I. 2022/582, reg. 2

16 Meaning of “dormant” in relation to eligible proceeds or distribution U.K.

(1) This section sets out the meaning for the purposes of this Act of “dormant” in relation to the different kinds of eligible proceeds or distribution.

(2) Eligible share conversion proceeds are, or an eligible distribution is, “dormant” at a particular time if, at that time, the traded public company concerned regards the relevant individual as having been gone-away throughout the preceding 12 years.

(3) For the purposes of subsection (2)—

(a) the relevant individual is the individual in whose name the share was registered immediately before its conversion, and

(b) a company may regard an individual as “gone-away” throughout a period if it has received no communication from the individual (or any person acting on behalf of that individual) during that period.

(4) Eligible corporate action proceeds are “dormant” after a period of at least 12 years—

(a) beginning with the day on which the traded public company concerned is notified of the consideration in relation to the corporate action, and

(b) during which the proceeds have remained unclaimed.

(5) Eligible corporate action proceeds relating to a share may also be treated as “dormant” at any time if they become money owing to a person after the transfer to an authorised reclaim fund as mentioned in section 14(1)(a) of eligible share conversion proceeds from the same share.

(6) In this section, in relation to a share in a traded public company—

• “eligible corporate action proceeds” means an amount owing by virtue of a corporate action, as mentioned in section 15(1)(c),

• “eligible distribution” means an amount owing as a distribution as mentioned in section 15(1)(b), and

• “eligible share conversion proceeds” means an amount owing by virtue of the conversion of the share as mentioned in section 15(1)(a).

Commencement Information

I5 S. 16 not in force at Royal Assent, see s. 34(3)

I6 S. 16 in force at 6.6.2022 by S.I. 2022/582, reg. 2