Are over-70s liable to new PRSI on unearned income?


I am well over 70 years of age. I have unearned income in the form of bank deposit interest .

Am I liable to the new PRSI on those earnings?

Also I have State Savings Bonds; these were marketed as being tax free when I purchased them; does this mean they are free of both PRSI and DIRT for 2014 which would be returned in 2015 ?

There is no information available that I can find.

Mr JK, email

People do worry terribly over such changes when they occur, especially older people – mostly because they are keen to ensure they are compliant but are not really sure how to go about it.

For all the information that is available on government websites and elsewhere, it is strange that such relevant details are not pulled together in one place for retired persons.

Anyway, the good news from your perspective is that you are not liable to the new PRSI charge on “unearned” income.

PRSI only applies to people between the ages of 16 and 66. As you are “well over 70” in your own words, it is not something that needs to concern you.

Similarly, there is no tax due from you in relation to your investment in State Savings Bonds.

These are sold expressly as a tax-free product and are not therefore liable to tax, including Deposit Interest Retention Tax (DIRT).

All told, therefore, you can rest easy.

There is no tax due on your savings – apart from the DIRT you already pay on your bank deposits if your income is above the exemption threshold. Vodafone for those who did nothing I have Vodafone shares but, during the Verizon manoeuvring I had a lot of family sickness to deal with. If you didn’t sign anything over and fill in the 50 million forms, emails and declarations, what position are you in with your shares?

Ms FL, email

Most of the people I meet are sick, sore and tired of the Vodafone/Verizon story at this stage but every time I think we have exhausted the list of possible queries, a few more land in the in box.

You were clearly distracted by family matters when the whole brouhaha was going on over shareholders rights and shareholder deadlines. All of which makes it a bit easier to set down your position now that it is all over. Essentially, for every Vodafone share you held before the whole thing kicked off you received a sum of cash and a portion of a Verizon share.

In addition, they took your old shares in the company and issued new ones to you. For every 11 shares you held previously in the telecoms group, you now hold six. The default option in that restructuring was that the company would hold your shares electronically through its share registrar Computershare. As you made no decision to the contrary, that is where your shares now reside.

Any shareholder certificate you hold is no longer valid and Computershare should have sent you a letter outlining your new holding. The return of value was also affected by a series of default positions for people who did not exercise preference for an alternative offer. Thus the cash paid to you – 36.5 cent per old share held – was paid as a “special dividend” subject to income tax, universal social charge and PRSI. It is up to you to declare the income and pay the taxes. The cheque should have arrived to you long since.

As to the Verizon shares, effectively you got one of these for just under every 39 shares you held in Vodafone – 0.026 of a share for each Vodafone share held. Any fractional entitlement that did not convert into a Verizon share was paid to you in cash and should have arrived long since.

As most people would only hold a handful of Verizon stock, the company offered to facilitate their sale for cash, free of commission, but this offer expired on April 4th, so it will now cost you to sell them. You are also liable to income tax, USC and PRSI on the value of these shares. In addition, you are liable to US tax on any future dividend payable by Verizon, which is another annoyance for mostly small, first-time shareholders.

Got nothing from Vodafone When the Vodafone documents came out, I researched the options and followed the commentary to the extent that all my friends and my wife’s friends came seeking advice. I posted my documents as required to Vodafone quite early in the process. As life, family bereavement, work and study took over, I took my eye off the ball – assuming the once my documents were returned all was well.

Somewhere along the line I heard in passing that Vodafone payout was going to begin in a few weeks. I am now rather shocked to discover that this payout has come and gone and that I have received nothing.

Where do I stand now as the non-tax option has passed. What should I do or who might I contact to find out what has gone wrong.

Mr TF, Galway.

Jeepers, you should have had your money by now as the money was paid in last February. And, assuming you selected the “capital” alternative, you are most unlikely to have a tax liability. If you failed to indicate, you will be liable to income tax (see above).

You have lost out on the facility for commission-free sales of your Verizon shares as that ended on April 4th.

You should immediately contact Computershare on 01-6968421 or in Bristol on +44-870-7071739. Make sure you have your shareholder reference number to hand.

Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara St, D2, or email This column is a reader service and is not intended to replace professional advice.

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