Questions and Answers
These are answers to some of the most commonly asked questions so far. Comprehensive details and a fuller Q&A will be available in the invitation document, which will be sent to Leon Club Members in early June.
1. Why do you need the money?
We regularly get requests from our Club Members to open new restaurants in new areas so that is what we'd like to do in a careful and considered way. At the same time we will establish the not-for-profit Leon Foundation, the first initiative of which will be to set up an annual cookery school for children with renal problems and their parents. In future we may use the money to set up Leon outside the UK. All of these investments will bring us closer to our vision of making it easy for everybody to eat good food. We may also choose to use a proportion of the money to reduce our borrowings but only where we feel that money would not be better applied to opening new restaurants or to establishing the Leon Foundation.
2. Why don't you raise the money from the bank?
We have looked at this as an option but we think that this way of raising money means we can let some of the people who eat with us regularly get involved in the business and give them the benefits, rather than handing those benefits over to a bank.
3. What happens if the bond is oversubscribed?
The response from those members of the club who we sounded out on the idea, suggested that this bond would be popular. If people want to invest more than the £1.5 million we had hoped to raise we will allocate the bonds on the basis of who lodged their application first. At the same time, the bond is set up in such a way that we could take more that the £1.5 million if we decided to.
4. What is the tax position?
The £eon Pounds are taxable income for income tax and, for corporate bondholders, corporation tax purposes. Leon is obliged to deduct basic rate tax at source for income tax payers before crediting you with your £eon Pounds. The net figures shown in the summary of Bond options on the document "A Note about the Leon Bond" are what you will receive. For corporate bondholders, as corporation tax payers are wholly responsible for their own tax affairs, they will be credited £eon Pounds without deduction at source by Leon. The gross figures shown in the summary of Bond options are what corporate bondholders will receive.
5. What are the consequences for me as a Bondholder?
We will make the necessary arrangements to deduct tax at source for income tax payers at the basic rate of income tax - so you won't have to pay anything to the tax man if you are a basic rate income tax payer. Corporation tax payers are wholly responsible for the tax payable on their £eon Pounds. In either case, we strongly recommend that all applicants who are or might be liable for tax, especially higher rate income tax payers and corporation tax payers, consult their own independent financial advisors as there may be some further tax payable.
6. When can I get my money out?
You can get your investment back in full after the initial term of three years, which is the minimum commitment. After that, and on each anniversary of your initial application, you will be entitled to all of your investment back, without charges or deductions. Or you can choose to hold onto your Leon Bonds.
7. Is the rate of return fixed?
Yes. No matter how long your funds remain invested in your Leon Bonds the rate of return will not change. We have the right to redeem some or all of the Leon Bonds at any time (whether before or after the initial three-year term). If we do this, we will pay you back an additional 1% in £eon Pounds on the funds you invested when we return the money.
8. When will I start to get my £eon Pounds and how often?
You will be sent your first full year's worth of £eon Pounds on 1st August 2012. You will then receive a further full year's worth of £eon Pounds on 1st August in each year you hold the bond.
9. Can my company invest to give free food to people who work for us?
Yes, you can invest as a company or as a person.
10. Can I invest a smaller amount than the £1,500 bond?
Sadly this is the smallest amount that we can administer efficiently. We would have loved to open up participation more broadly.
11. Do I need to bank online to apply for a bond?
No. Payment for Leon Bonds will be by debit card on a dedicated website.
12. I still have more questions, how can I have them answered?
If they concern your personal investment portfolio, you should put them to your own independent financial advisor. If they concern the terms of the Bond itself please email us at firstname.lastname@example.org and please include your telephone number. We will endeavour to respond within 48 hours of receipt.