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Deadline looms for Widows&#39 loan notes

Scottish Widows is issuing a reminder to around 45,000 customers who

hold loan notes from its demutualisation that the latest deadline for

their redemption is at the end of March.

The notes, which allowed former members to defer payment of capital

gains tax, were issued following demutualisation after Widows&#39

takeover by Lloyds TSB in 1999.

The new deadline is the third since the demutualisation and must be

met to enable holders to redeem their loan notes in 12 months time.

So far more than £530m has been paid out to loan-note holders

who have already redeemed either all or part of their holding.

However, more than £560m of notes have yet to be cashed in.

Customers have the opportunity to redeem every six months until March

2008 but Widows says for tax purposes they should be aware that this

redemption is the second this year.

Managing director of operations Ian Thompson says: “Scottish Widows

was the first company to offer loan notes as an alternative to

receiving cash windfalls, which were designed specifically to allow

qualifying members to defer payment of capital gains tax. In March,

those who opted for loan notes can realise some or all of their

windfall compensation.”

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