Skip to main content

Post-close events

  • Updated

Investor reporting

Reporting to underlying investors is at the discretion of the Investee Company, and is typically provided on a monthly or quarterly cadence.

In a syndicated deal, the Syndicate Lead may choose to manage this activity as a representative of the group of investors, or the information can be shared with the underlying investors directly by the Investee Company.

Odin does not itself provide regular reporting on your investments, but some Deal Leads will choose to communicate these updates with you through the Odin platform.

- -

Share certificates

The nominee entity that Odin manages is the legal custodian of your securities, so you will not receive any share certificates following the closure of a deal. However, we provide investors with certificates of beneficial ownership, which outline their holdings in specific deals. These can be downloaded via the platform.

- -

Selling and transferring shares

As standard, it is possible for investors to trade in and out of their positions in the SPV. We will reach out to the company confirming their approval of the transfer. We charge a fee of 1% of the value of the transfer, subject to a minimum fee of £200 and a maximum fee of £2,000.

A Transfer of Beneficial Interest (TOBI) allows for an investor in an SPV to sell their shares to another investor, who joins the SPV in their place. There are two types of TOBI transactions that we support:

  • Internal - Whereby an investor sells their position to another investor already within the syndicate. This does not require consent of the investee company.
  • External - Whereby an investor sells their position to an investor who is not currently within the syndicate. This does require consent of the investee company.

Please note that we only handle TOBIs in two trading windows per year, which are 22 January (for 2 weeks), and 01 August (for 2 weeks).

Transfers of beneficial entitlement between Odin members will not be subject to UK stamp duty but will be subject to UK stamp duty reserve tax. The reason is that the latter applies to ‘chargeable securities’, which is a wider scope covering paperless transactions and interests in shares.

The tax rate is the same (0.5%) however there is no de minimis exemption for the SDRT regime (paper transactions less than £1,000 are exempt from stamp duty).

- -

Tax requirements by jurisdiction

  • EIS and SEIS
    • The Enterprise Investment Scheme and Seed Enterprise Investment Scheme are government schemes which incentivise investment into UK companies via tax relief. Claims can either be submitted for the current tax year, or backdated into a previous tax year.
    • It’s very important to remember that EIS and SEIS can only be claimed on whole shares, and not fractional shares. Where you’ve purchased a fractional amount of shares, Odin and the investee company would have to round down your claimable amount to the nearest whole share.
    • To give an example, if you’d invested £5,075 into a deal where the equity share price was £100, your EIS-claimable amount would be £5,000 exactly.
    • If the Deal Lead has specified a deal as being eligible for EIS, SEIS, or both, and the Investee Company has provided Odin with Advanced Assurance of this during the deal review process, as long as you a UK tax resident investing as an individual you will be eligible to claim relief via the relevant scheme after the deal has closed on Odin.
    • Please note that some deals have a limited pool of EIS or SEIS relief, and that it can often be dealt on a first-come-first-served basis. Always further confirm your eligibility with the Deal Lead before making a claim.
    • Ordinarily, S/EIS relief is the responsibility of the Investee Company. Sometimes, Odin will generate the S/EIS3 certificates for the deal’s investors and will distribute them instead of the Investee Company.
    • If the Deal Lead is making use of Odin’s rolling close facility, please note that you won’t receive an S/EIS certificate until the deal has fully closed on Odin.
    • The Investee Company will first need to complete the S/EIS1 form and submit it to HMRC. If everything is in order, HMRC will issue the Investee Company with an S/EIS compliance certificate, known as the S/EIS2 UIR.
    • Once this has been received, the next step is for either the Investee Company or Odin to provide each eligible investor with an S/EIS3 certificate, which provides the details they need for their tax return.
  • US Investor Reporting (PFIC/FATCA)
    • All Odin nominee entities are considered Passive Foreign Investment Companies (PFICs) under the Foreign Account Tax Compliance Act (FATCA). FATCA requires Foreign Financial Institutions to report information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest, directly to the Internal Revenue Service (IRS).
    • Odin’s US advisors, Bennett Thrasher, assist us with additional documentation so that there are no tax implications for US investors. As such, Odin can accept funds from US investors without issues. Please note, however, that Odin does not provide tax advice, and if you have any concerns we’d recommend speaking to qualified accountants and enquiring independently about PFIC taxation.
    • US investors are either investors who have provided Odin with a registered address in the US during their account setup, investors who have completed their KYC with a US passport, or investors who have otherwise informed Odin of their US nationality and/or taxpayer status.
      • Please note that if you have US tax liability, but have provided Odin with a passport and residential address from another country, you’ll have to notify Odin’s Customer Support team that you’re a US investor.
    • Odin does not handle blue-sky filings. If you require this our advice is to seek a provider. Odin also does not deal with K-1 forms, as they aren’t applicable to PFICs.
    • Odin’s process for ensuring tax compliance for US investors is as follows:
      • Once per year, in the run-up to the end of March, Odin provides PFIC documentation to US investors, so that they may make a Qualified Electing Fund (QEF) special election and report annual earnings under the QEF regime (instead of being subject to the Excess Distribution Regime, which incurs additional taxation). This ensures no additional tax liability on their investments held via Odin vehicles.
      • US investors have additional reporting requirements regarding their investment in a PFIC. We advise US investors to file Form 8621.
        • Additionally, if the value of your investments is greater than $50k, (or greater than $100k if you are married and file jointly with your spouse), you will also have to submit Form 8938. You can find more guidance here.
        • Those investors required to file Form 8938 must do so annually as part of their personal tax returns. Since the PFIC has no income in Odin's case (no dividends are paid), investors may choose only to file form 8621 once an exit event occurs, in order to make a QEF election on the capital gain. However, we advise investors to take independent tax advice on this matter.
      • Odin provides the information needed for all of these filings, but don’t handle the filings for the user. You need to fill out the forms yourself with the data we provide.
      • Odin does not charge US investors for any of this, instead any relevant costs are passed onto the Deal Lead.
  • Tax reporting in other domiciles
    • Because Odin uses a United Kingdom Bare Trust structure to administer investments, there is complete tax transparency. This means that in practice, there are no geographic restrictions around where investors can invest from, or the companies they can invest into.
    • Because of this tax transparency, you as beneficial owners of the shares would pay tax wherever you were tax resident upon a liquidity event. You do not have tax liability in the UK unless you are a tax resident in the UK.
    • Odin does not provide tax advice in any geography, and if you have any questions we’d recommend seeking independent advice and/or speaking to qualified accountants.
    • The same applies to any other government-sponsored tax relief scheme operated in your home country. If you need to process a claim for tax relief based on these schemes, Odin’s advice is to seek advice from a qualified accountant in the country they’re claiming the relief in.

- -

Exit events

An exit event refers to any event whereby you as investors can realise a return on their investment, such as the sale of the investee company or an initial public offering. Odin is well-equipped to handle the admin surrounding exit events.

  • As soon as Odin receives the legals in relation to the exit - Our team will record the legals in the same shared folder that can be used to access investment agreements and share certificates. Odin will then provide our bank details in the relevant currency to the investee company and their lawyers, and will regularly monitor for the inbound funds.
  • As soon as Odin receive all funds and legals from the investee company - Our team will begin work on an exit calculation, to be saved in the same internal folder as the legals. This exit calculation will then be submitted for review by our Finance team. This includes all amounts to be returned to investors, plus the carried interest the Syndicate Lead(s) will be receiving (if applicable). For every investor involved in the exit event, we’ll create a personalised copy of the Exited Investment Letter and share with every investor via email.
  • As soon as investors reply - Our team will set up a wire request internally for each investor, including their bank details (we use the ones that investors provide to us upon account setup, but will always confirm that this is the bank account they’d like the exit proceeds wired to). Funds will then be released to the investor. The exit event is completed from Odin’s perspective once this has happened for all investors.

- -

Conversion events

  • What’s a conversion event? A conversion event refers to the conversion of debt raised in a previous investment agreement into shares of the issuing company. Conversion events occur under certain conditions and can either happen very quickly or several months after the investment agreement was signed.
  • How is this reflected in Odin? Once conversion legals have been completed, Odin will include those docs in the same folder that you can access to see the original set of legals the deal was closed under. Odin will not update the deal to an equity deal and edit the details to include new relevant information, like the share price. This is because we have to ensure the deal reflects the original terms the SPV invested under for posterity. You will be able to infer all relevant information, as well as understand your new shareholding, from the conversion legals.

Related articles