Sunday 23 November 2014

€3.5m office spend forces credit union into merger

Charlie Weston, Brian Byrne and Tim Healy

Published 06/03/2014 | 02:30

THE collapse in the value of plush offices built during the property boom has been blamed for the forced merger of a credit union in affluent Howth.

The savings accounts and loans of Howth Sutton Credit Union have been transferred to a neighbouring credit union after its reserves were wiped out. However, the Howth office will remain open and savings are all safe.

Offices on Howth Main Street that cost €3.5m to build in 2008 have had their value written down heavily in the books of the credit union, prompting its reserves to collapse.

Loan arrears were not behind the decision of regulators to seek the merger.

There are close to 3,000 members of the credit union in Howth and Sutton, with total loans of €2.4m, and savings of €6.7m, documents presented to the High Court show.

If you failed to return the Form of Election, Return of Value document, your payment would have been automatically treated as income and will now be hit with income tax. The amount will also be subject to PRSI and the Universal Social Charge. But if you chose the capital option, you are likely to have avoided tax.

The reason for this is that if you bought Eircom shares in 1999, those shares became Vodafone shares in 2001 when Eircom sold its mobile arm Eircell to Vodafone.

If you still hold those shares, you have most likely made a loss on your initial investment in Eircom and the Revenue Commissioners have indicated that you won't have to pay any tax as a result – as long as you received your payment as capital.

Last month, Vodafone estimated that if you held 1,000 shares, you would have received a cash payout of about €365 and about €877 equivalent value in Verizon shares.

If you are an individual shareholder with fewer than 50,000 Vodafone shares, you will, if you wish, be able to sell all, but not part, of your Verizon stock through a cost- and commission-free dealing facility.

To do this, you must return the form you received from Vodafone, highlighting this, by April 4.

Irish Independent

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