Tuesday 6 December 2016

Postal delay set to cost Standard Life's Irish shareholders dearly

Published 18/04/2015 | 02:30

It is understood that Royal Mail had responsibility for the mailing, as the shareholders had used an International Business Reply product provided by Royal Mail.
It is understood that Royal Mail had responsibility for the mailing, as the shareholders had used an International Business Reply product provided by Royal Mail.

Up to 4,000 Irish shareholders of Standard Life could be hit with a higher tax bill on a share pay-out due to a delay in their payment forms being received.

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Tens of thousands of Irish shareholders in the Edinburgh-headquartered company are due windfalls on average of more than €1,200 from the company.

Standard Life announced last year that it had sold its Canadian division and planned to pay the proceeds of the sale back to the shareholders, of which there are 60,000 in Ireland.

Shareholders could decide how they wanted to receive the so-called return of value, either as capital or income, or a combination of both.

But now Standard Life has said that 4,000 forms from shareholders who had opted for either capital, or a combination of income and capital, have been treated under the default income option - potentially lumping them with a higher tax bill - as the forms were received three weeks late even though they had been sent prior to the deadline.

If a shareholder selected the capital option, capital gains tax is levied at 33pc. But some shareholders may have avoided tax altogether because an exemption applies to gains of €1,270 or less.

Under the income option, the share pay-out would be subject to income tax, as well as PRSI and the Universal Social Charge, which could amount to a levy of 51pc.

If a shareholder missed the deadline to return their payment forms setting out how they wanted to receive their payment by the deadline of 4.30pm on March 18, their payments would be automatically made under the income option.

Standard Life said a batch of mail arrived from Ireland after the Easter bank holiday weekend between April 7 and 9.

"On reviewing these forms, it's clear that there has been a substantial time delay in them reaching us," a spokeswoman for Standard Life said.

"We successfully processed all of the share scheme election forms we received from Irish shareholders by the 18 March deadline. It appears something has happened in the postal system on this occasion to cause a substantial delay for about 4,000 of our Irish shareholders. As a result, despite mailing them to us on time, their forms have arrived well after the due date."

Standard Life said it is liaising with An Post and the Royal Mail to seek an explanation.

It is understood that Royal Mail had responsibility for the mailing, as the shareholders had used an International Business Reply product provided by Royal Mail.

A spokesman told the Irish Independent that it was working with Standard LIfe to get to the bottom of the issue as a "matter of urgency".

A spokeswoman for An Post said it had no record of any delays on its side around the affected dates, but that the organisation would continue to work with Standard Life to establish what had happened.

Standard Life said it cannot reopen the scheme for affected shareholders, but said it would be contacting the Revenue Commissioners to alert them to the background.

"We will be writing to those shareholders affected in due course," a spokeswoman added.

A spokeswoman for Revenue said she was not yet aware of any contact from Standard Life.

Irish Independent

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