The Vodafone queries continue

Does elderly mother have to file tax return over Vodafone?   

My elderly mother, now retired, is an owner of Vodafone shares and my question is whether any gains on these shares, or the addition of the new shares to her holding, mean she has a liability for tax or if they are taxed at source so that she does not need to worry in terms of making a return?

She has limited other incomings and so perhaps a return – if it is required – may not apply if under a certain threshold?

Mr D D , email

First up, your mother has not received “additional” new shares. Instead, for every 11 shares she used to own in Vodafone, she now owns six.

On tax, assuming she did not opt to receive her “return of value” as capital, she is liable for tax. It is not deducted at source and she will need to file a return.

You say she has limited earnings. The income threshold for people aged 65 or over is currently €18,000 (twice that for a couple). If her income this year from all sources is below that, she will not have any tax liability.

Calculating loss on shares

My query relates to 922 Vodafone shares which I sold in January 2013. Approximately 700 of these were acquired at the time of the Eircom/Vodafone exchange in 2001, with the balance being received in lieu of dividends in the years to 2013.

Unfortunately, I have no idea of what was received at each payout. The documentation has disappeared!

In order to compute my (presumed) capital loss on these shares, I’m wondering whether there is a yearly price average available for Vodafone shares which Revenue will accept, or whether I can get the information I need from some other source.

Mr P K , email

Ah, that disappearing documentation, the bane of every investor. I think you can take it for granted that you will be totting up what ultimately amounts to a loss.

There are two ways of finding out how many shares you received in lieu of dividends down the years. First, you can work it out yourself by consulting the dividend history of Vodafone on the shareholder centre section of its website (click on this link http://iti.ms/OQMcqb). More easily, you can contact the share registrar, Computershare Investor Services (Ireland) Limited, PO Box 9742, Dublin 18, Ireland, or by telephone on 0818 300 999, according to the shareholder centre section.

Revenue will not accept a “yearly price average”, but it has helpfully advised how to work out what the loss on the original shares is at http://iti.ms/OQNq4w.

Astonished at approach to paperwork

I am astonished at the amount of space devoted to Vodafone in The Irish Times . I live in Northern Ireland and have had absolutely no problems with Computershare or the paperwork.

Dare I suggest many of the problems were caused by Irish people’s casual approach to paperwork?

Mr B McS , email

You're not alone in your view that this issue has garnered a disproportionate amount of space over recent months. The bottom line is that this column is driven by the reader and while I have made a deliberate effort in the past couple of weeks to move away from the Vodafone /Verizon issue, it remains the case that the vast bulk of my postbag continues to relate to the Vodafone return of value, despite the fact that we are now a full month past the deadline for that process.

Could many of the problems have been caused by a “casual approach to paperwork”?

Certainly. Computershare has been in touch again in relation to the second phase of the process – availing of its low-cost offer to sell the Verizon shares that have been issued to Vodafone shareholders as part of the exercise – to note that even though people need only put an X in one box and then sign and date the form, it has already had to reject a number of forms because people have failed to sign them.

Is this a particularly “Irish” problem? In my experience, no.

Failure to fully read forms is a problem in most countries, including the UK. The longer the form, the more legalistic and the more small print, the less likely people are to do so.

I’m glad you had no problems with the paperwork, or Computershare. I’m sure the majority of people are in the same position. Inevitably, columns like this hear only of the problems.

And there were problems this time around, not least because of the impossibly tight deadlines put in place by Vodafone. When I say impossibly tight, I mean that it was overly optimistic in its assessment of how long it would take to get forms from Bristol to Ireland, filled out and
returned.

That they were exacerbated by the fact that most of the Irish shareholders were totally inexperienced in dealing with shares in publicly listed companies – their Vodafone holdings dating back to an ill-fated punt on Ireland's first major utility privatisation, Telecom Éireann – seems clear.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara St reet, D ublin 2, or e mail to dcoyle@irishtimes.ie. This column is a reader service and is not intended to replace professional advice.