If we did become insolvent, the ability of investors to recoup the funds they have invested would depend on firstly the value we (or the appointed insolvency practitioners) could get for the assets of the society and secondly, the value of our debts at that point.

In the event of our insolvency or orderly winding-up, the proceeds from the sale of those assets and our cash would firstly pay off all our creditors, and if there were any funds left at that point, would be used to pay back shareholders as much of their investment as they have outstanding as possible, on a pro-rata basis.

As a ‘common ownership’ society, our rules state that should there be any surplus after returning funds to investors this would have to be given to another organisation supporting the co-operative movement and which has a similar common-ownership clause.

Investors who have claimed tax relief would also be eligible to claim loss relief against their tax liability for the difference between what they invested less any tax relief already claimed and what was returned to them. So, let’s say someone has invested £1,000, using the cash made from selling an asset that’s deemed a capital gain. They can claim 30% of it against their income tax, and also reduce the Capital Gains Tax bill by half. All told they reduce their tax bill by £440, meaning they have invested £1,000 at a cost to them ultimately of £560.

Let’s say we then become insolvent and no one gets their money back. As far as HMRC are concerned, that means the investor has lost the value of their investment less their 30% income tax relief, so they’ll be able to declare that £560 loss against their tax liability, which would enable them to recover all of it.