Q&A

Dominic Coyleanswers your questions.

AVCs for online filers

You recently mentioned that October 31st was the absolute deadline for people looking to beef up their AVCs. Is this also the case for people filing online through ROS?

Mr P.B., e-mail

When it comes to tax deadlines there are, as you suspect, two distinct sets of deadlines. For those of us still filing on the old pen and ink system, October 31st remains the red-letter day. Those filing through the Revenue Online Service (ROS), however, have an extra couple of weeks leeway. This year, the ROS deadline is November 15th (Thursday next).

Revenue assures me that for people filing online, the deadline for lump-sum investments into an additional voluntary contribution (AVC) plan is also November 15th.

I note that you have received contradictory information yourself from communications with various Revenue contact points - eg, that October 31st was the deadline, regardless of how you filed - and I am conscious how frustrating it is not to get accurate information from such sources.

Redeeming shares

I am a Vodafone shareholder who in August 2006 was affected by the company's initial redemption offer, whereby I elected not to keep all of my B shares and therefore the shares were redeemed at 15 pence per B share. What are the capital gain and or income tax implications for my return of income 2006? What are the calculations involved? I own 400 shares in Vodafone and received a total of €87.93 in payment.

Mr M.S., e-mail

Vodafone's share redemption offer, designed to return some cash to shareholders, was designed to allow shareholders to opt for one of several different means of payment and the tax treatment will depend on which option you took.

The most likely scenario in your case, from what I can tell, is that you took the default option A, where the B shares were redeemed by the company at a rate of 15 pence each (21.6 cents at the time). This was the option applied to all Vodafone shareholders who did not consciously choose an alternative approach.

Assuming you have no other capital gains for 2006, the Vodafone payment of €87.93 will leave you well under the €1,270 annual capital gains tax exemption and you would owe nothing to the tax authorities.

Returning to your specific case, if you opted for option B, where the 15 pence a share was paid by way of a special dividend, the same payment would come under the income tax code. This option was really only of use to those people not paying income tax for the year in question.