Making the right call with your Vodafone shares
I have just 481 Vodafone shares and wish to sell. I am wading through forms. I have signed blue and yellow, not clear about white. Can you help? I assume I select 2 on white to receive capital payment. Am I correct?
Ms A.K., email
Forgive me if the answers to queries this week is briefer than usual but there is, not surprisingly, a massive and growing postbag on the Vodafone/Verizon issue.
Before everyone gets too worried about the impending deadline, bear in mind that the only forms that need to be returned this week are the blue and yellow forms you will have received with your “information pack”. These refer only to casting your votes by proxy (ie in your absence, assuming you will not make the special shareholders’ meeting called to vote on the Verizon deal on January 28th in London).
If you have not yet returned these, you might be best advised to indicate your
The other (white) forms indicating how you wish to receive your “return of value” payment and whether you want to use the free share-
dealing facility to sell the Verizon shares you will receive do not have to be returned until February 20th and April 4th respectively.
In your particular case, there is no real urgency because you have completed the blue and yellow forms indicating how you want to vote on the substantive issue – the sale by Vodafone of its US interest in the joint venture with Verizon.
As you say, there are plenty of forms to wade through and enough accompanying information to confuse anyone but a lawyer or a specialist in share dealings.
There are two separate white forms – a “Form of Election: Return of Value 2014” and a “Dealing Form”. Although they are attached, they can and (to avoid confusion) should be separated by tearing along the dotted line.
The form you are referring to is the form of election,
which contains five distinct sections.
Section 1 asks what currency you wish to receive your payment in. The default for shareholders with an address in the Republic is euro, while those in Northern Ireland will default to sterling. Unless your circumstances are out of the ordinary, you do not have to place an X in any box here as the default will apply. If you wish to adopt a “belt and braces” approach, mark the euro box (the second of the three options in section 1) with an X.
Section 2 is the all-important selection of income or capital options. The default is income. For almost all Irish shareholders – and certainly for anyone with a holding like yours – the most tax efficient option is capital and you should place an X in that box. Failure to do so will see your windfall paid as income and most likely see you incur an unnecessary tax bill.
Capital is the best option because, as Revenue have indicated in their provisional guidance on the transaction, you will be incurring a capital loss and therefore will have no tax to pay.
Section 3 is a matter of choice. If you wish to hold your own share certificate, place an X in the box; otherwise Computershare will hold your new Vodafone shares in a Vodafone share account.