MOST small shareholders wilt be able to make a tax free profit on their Norwich Union shares.

At the moment, a single person is allowed to make investment gains of up to £1,000 without incurring tax, while this rises to £2,000 for a married couple, which should cover most small shareholder's gains.

Norwich Union has confirmed that policyholders receiving free Norwich Union shares will not be liable for any income tax, but the Revenue is treating them as if they were purchased at zero pence.

This means, that if you get shares worth £500 and you sell them for £750, the Revenue would be entitled to charge pay capital gains tax at 40 per cent on £750.

As this is well below the capital gains tax allowance no tax charge would arise.