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  #1  
Old 02-07-2006, 11:30 PM
Guest127 Guest127 is offline
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Default Payout by Vodafone

as I understand it the following is the situation for anyone still with vodaphone shares. for every 8 shares you currently have you will receive 7 of these 'b' shares which are worth 15p sterling each. you then have 3 alternatives a)redeem them and receive a cheque on 11th august
this payment will be treated as capital.
b) initial share dividend - you receive a single dividend of 15p for each B share and all your B share are then converted into deferred shares and you will get a cheque for the share dividend on such shares on 11th august. this is treated as income
c)future share redemption - retain your B shareS and have the right to rdeeem them on future redemption dates at 15p per B share. they then state that this alternative may be of value to an Irish taxpayer and that on redeption the proceeds wil be treated as capital for Irish tax purposes.

what exactly do they mean by capital as against income in the above scenarios? why is the third one more beneficial to irish taxpayers then say the first one as on redemption both are treated as capital.
I understand the term income but the term capital in this case has me puzzled.
thanks
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  #2  
Old 03-07-2006, 09:01 AM
jpd jpd is offline
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Default Re: Payout by Vodafone

By "capital", I presume that they mean the monies received will be treated as a capital gain and thus be taxed at only 20% (after annual allowance of 1,270) whereas "income" is taxed at taxpayer's marginal rate (20% or 42%) plus health levy
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  #3  
Old 04-07-2006, 12:36 AM
Guest127 Guest127 is offline
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Default Re: Payout by Vodafone

love to think you are correct but in that case option A is equal to option C
But they dont state capital gain just capital.
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  #4  
Old 04-07-2006, 12:56 AM
ClubMan ClubMan is offline
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Default Re: Payout by Vodafone

For what it's worth First Active did a capital repayment to shareholders just before the UB takeover and it was assessable for CGT rather than income tax. See this Revenue article.
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  #5  
Old 04-07-2006, 10:09 PM
Guest127 Guest127 is offline
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Default Re: Payout by Vodafone

thanks CM. benefited from that First Active payment and also the later buyout, in which I did have to pay some tax ( but was allowed eircom losses by the revenue). know that FA were in talks with the revenue for a period before the first issue of 'b' shares as a way of distributing surplus cash prior to the takover in order to minimise the tax liability of the shareholders. hence the issue of the 'new shares' Think that Vodaphone have done the same. ie if they just wanted to increase the dividend we would all get the same amount but all the dividend would be taxable, by issuing 'b' shares and then encashing these shares appears to be a method of distributing cash without attracting immediate tax liability (depending on other gains or selling of other shares)
cheers
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  #6  
Old 04-07-2006, 11:18 PM
ClubMan ClubMan is offline
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Default Re: Payout by Vodafone

Aren't the relevant tax issues explained in part VIII of the circular?
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  #7  
Old 07-07-2006, 12:26 AM
Guest127 Guest127 is offline
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Default Re: Payout by Vodafone

apologies CM. should have RTFM .
cheers
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  #8  
Old 07-07-2006, 01:23 AM
Nosey Joe Nosey Joe is offline
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Default Re: Payout by Vodafone

Hi Cú its nosey Joe back , Financial issues are gobbelygook to the ordinary man on the street. From 5th class up to leaving cert and beyond pension rights, values, share issues, taxation etc should become a core subject. There are too many people that are naive in these matters and are losing out because of this. I know I am straying but I feel it is linked. Not saying that the posters are naive . I am
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  #9  
Old 07-07-2006, 10:55 AM
ClubMan ClubMan is offline
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Default Re: Payout by Vodafone

I think I have some understanding of tax and personal financial matters and have had limited direct share investments (mainly eircom, First Active, Vodafone and some ESPP/ESOP shares from various employers) and yet my CGT issues are horribly, horribly complicated at this stage! I just about managed to understand the whole FA capital repayment and takeover CGT issues and make a return that wrote off some eircom losses but I lost the calculations so don't know offhand what sort of losses I might have left to write off against future capital gains. It's all so complicated that it makes me inclined to steer clear of direct share investments as far as possible these days.
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  #10  
Old 08-07-2006, 12:02 AM
Guest127 Guest127 is offline
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Default Re: Payout by Vodafone

you and me CM. to complicate matters mrs cu gets dividends from Boi shares (former employee) but takes the cheques and spends them.( nothing wrong in that, they are her shares) but I have and hate doing it, to pry the amounts out of her so I can declare them , there is a tax on them of 20% already deducted but 'we ' owe the difference most years. then there's the demut of scottish providend who issued a loan note (sterling in uk about Ł4000) and they forward approx €110 after tax every six months. my understanding of this was that I declared the 'full' amount of the interest on the loan note, the irish tax then added it to my income for tax purposes, when I originally declared it ( around 2004) I completed a form which I handed into my local tax office as they had to stamp it and forward it to the british revenue in order for me to reclaim the 'original' tax deduction by british revenue. guess what. The irish revenue guy said it was ok as I already paid tax on it and he wasnt going to tax me or make me go to the bother of claiming a refund from the british tax authorites. maybe because it was interest on the loan note (and not a dividend )and the rate of dirt tax is exactly the rate of tax I am deducted anyway that he said it wasnt worth it. Nothing is simple is it?

NJ good to hear from you again. Drogs are flying ( not like Bohs or The Town). Sorry to go off subject here. Did you purchase in Turkey that time?
cheers
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  #11  
Old 08-07-2006, 08:11 PM
Robo Robo is offline
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Default Re: Payout by Vodafone

Hi
I am attempting to calculate my tax liability in relation to the vodafone pay out. If I select option (a) the pay out is treated as a capital gain. I am assuming that allowable costs will be nil, as I did not purchase the shares. I presume that the calculation will be similar to the ones below for first active shares, but I should replace the cash received value below (€3,069) with the amount I receive from Vodafone.


Please correct me if I am misreading the situation.

Example 1: 'Free' shares only

Mr. A acquired 450 `free' First Active shares in 1998. In addition he acquired 45 loyalty shares, at no cost, during 1999 and 2000. On the acquisition of First Active by the Royal Bank of Scotland he received a cash payment of €3,069. His computation of capital gains tax for 2004 is as follows, assuming he has no other chargeable disposals or unused prior year losses.
Cash Received €3,069
Allowable Costs (Note 1) Nil
Chargeable Gain €3,069
Less Personal Exemption (Note 2) €1,270
Net Chargeable Gain €1,799
Tax Payable (Note 3) €359.80

Note 1: As the shares were acquired at no cost they have a 'nil' base cost.

Note 2: The first €1,270 of an individual's net gains is not chargeable. This exemption is not transferable between spouses.

Note 3: The tax is payable on or before 31/10/2004. If Mr. A disposes of other assets during the 9 months to 30/9/2004, his calculation of tax payable will be based on the aggregate of all disposals in that period.
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  #12  
Old 08-07-2006, 09:19 PM
ClubMan ClubMan is offline
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Default Re: Payout by Vodafone

Quote:
Originally Posted by Robo
I am assuming that allowable costs will be nil, as I did not purchase the shares.
If you received the Vodafone shares as part of the Vodafone takeover of eircell [2000] then you can set some of the original cost of your eircom shares against these as the nominal acquisition costs. I have not worked it out yet or revisited this complicated area yet so I can't give you any more detail than that right now. See this thread:

CGT losses on eircom shares
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  #13  
Old 09-07-2006, 12:20 AM
Nosey Joe Nosey Joe is offline
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Default Re: Payout by Vodafone

No Cú I didnt buy in Turkey. Went out for viewing, lovely houses and I fell totally in love with them, but the area of Kusadasi is too Turkish for me and also the bombings last year put me off. My best friend has bought in Fuertaventura and has offered me limitless holidays there, which will suit grand but the hankering is still there to buy .Maybe Fuertaventura, Menorca , or Tuscany. Or maybe Carlingford and bring some intelligence to the area.
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  #14  
Old 09-07-2006, 01:01 AM
Guest127 Guest127 is offline
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Default Re: Payout by Vodafone

dwada accents wouldn't ( widint in toon accent) mix well in carlingford with all the norn ireland ones. thinkink of buying in alanya myself. cm will have kittens if we continue this here and Tir Chonaill will remove it. cheers old pal
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  #15  
Old 10-07-2006, 01:16 PM
WizardDr WizardDr is offline
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Default Re: Payout by Vodafone

My understanding with VodaFone is that if you do NOTHING, then you will receive the proceeds from a 'B' share issue. My understanding is that this will not affect the existing base cost of the continuing shares even if they reduce the number.

This will have 'NIL' base cost, and if you have no other gains, then you can use your annual exemption and have a NIL liability for CGT. If you are already using the limit, and have no allowable losses, then you will pay at 20%

If you take the alternative, you will be receiving a dividend. For most that means 42% + those feckin levies. If you have low income this might be the way to go.

Most should opt for the first option, or do nothing.
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  #16  
Old 10-07-2006, 01:26 PM
ClubMan ClubMan is offline
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Default Re: Payout by Vodafone

Quote:
Originally Posted by WizardDr
This will have 'NIL' base cost, and if you have no other gains, then you can use your annual exemption and have a NIL liability for CGT. If you are already using the limit, and have no allowable losses, then you will pay at 20%
Surely people who acquired Vodafone shares through their original eircom shareholding (i.e. through Vodafone buying out eircell2000) can still set some of the original eircom acquisition costs against their Vodafone shares as nominal acquisition costs? If not, why not?
Quote:
Most should opt for the first option, or do nothing.
I assumed that if/when the prposed return of capital is approved by sufficient numbers of shareholders then shareholders would be requested to return their original share certs in order to have the new certs for the adjusted number of shares issued?
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  #17  
Old 22-01-2007, 01:44 PM
GeneralZod GeneralZod is offline
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Default Re: Payout by Vodafone

I took the do nothing option A and got a cheque on 11th Aug 2006 for 96 euros.

I'm trying to declare it on ROS on-line.

Does this go under "dividends and distributions" or do I have to submit a paper decalaration for this.
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  #18  
Old 23-01-2007, 11:20 AM
frankmac frankmac is offline
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Default Re: Payout by Vodafone

I am interested in this topic purely from the fact that I have not heard anything from Vodafone regarding B shares or options. Anyone give advise on how I should follow up on this.
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  #19  
Old 23-01-2007, 11:36 AM
ClubMan ClubMan is offline
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Default Re: Payout by Vodafone

Contact the Vodafone registrar Computershare - see here. You'll need to quote your SRN (Shareholder Reference Number).
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  #20  
Old 31-01-2007, 10:52 PM
XferAgent
 
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Default Re: Payout by Vodafone

Hi There. I work as an transfer agent. My understanding of the Vodafone Return Of Capital, is that, if you take to B shares you will receive just that, B shares. Any shareholder who decides to take the cash for the B shares will receive that payout. But what Vodafone has done is issue that money out as a "Dividend". There for any shareholder who receives this monies, will have to report it as an earning, along with all other dividends. United States citizens you hold Vodafone ADR's did not have the choice for "B" shares and automatically received the Return of Capital cheque, again, that is classified as a dividend. I know it is the exact opposite of what the circular read. ***USA shareholders, that ''Return of Capital'' will be reported on your 1099div forms as a dividend***
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