Dáil Éireann Debate, Thursday - 9 July 2015
119. Deputy Róisín Shortall asked the Minister for Finance if he will report on the communications his Department has had with the Revenue Commissioners regarding 5,300 Standard Life shareholders who have been negatively impacted by a postal delay; if he will consider granting them an exemption from the tax liability they are due to incur as a result of this delay; and if he will make a statement on the matter. [28162/15]
View answerThe UK company Standard Life plc, offered its shareholders the option of having return of value payments due to them treated as income or capital, with treatment as income being the default position in the absence of shareholders choosing an option within a specified time which has now elapsed.
The Revenue Commissioners have informed me that, from an Irish tax perspective, the position is that if the Standard Life return of value payment is received as income by an Irish resident taxpayer it will be taxed under Income Tax rules. If it is received as capital it will be taxed under the Capital Gains Tax rules.
In last year's Finance Act, I included provisions allowing for a measure of tax relief to the many thousands of Irish shareholders with a small shareholding in Vodafone plc who inadvertently found themselves subject to an unintended liability to income tax, PRSI and USC rather than a nil capital gains tax liability arising from a return of value payment from that company. I did this because the shareholding of very many of those individuals arose originally from their investment in Eircom plc and, as a result of which investment, they continue to carry capital losses. I considered, given the particular background in that case, that to leave those shareholders with income tax and other liabilities on foot of a decision they inadvertently made or didn't make at all would have been inequitable. This particular background is not a feature of the Standard Life return of value case.
The fact that notifications of the options made by some individuals in the Vodafone case last year were delayed in the post beyond the deadline date in that case or were otherwise not dealt with by the company as shareholders would have wished were not factors in my decision to provide the relief, the reason for which I have outlined above.
I am not in a position to say who or what is responsible for the problem that has arisen for the Irish shareholders in Standard Life plc. While I can understand the frustration of the shareholders, I do not think it an unreasonable point to make that the State should not be required to intervene by way of changing tax legislation on each occasion that a difficulty arises resulting from the administrative arrangements put in place by commercial public limited companies for dealing with their shareholders.
All that said, I will give careful consideration to the views and concerns expressed by the Deputy, as well as those of others that have been expressed to me in this matter, in the course of my preparations for the forthcoming Finance Bill.
