# Eircom Shares from 1999



## CarPark (23 Oct 2013)

A bit of a long story below, but I am completely lost in these matters, so I would really appreciate your advice on the questions outlined at the end.

I was just over 18 at the time that the Eircom shares were offered to the public.  I had no money, and the amount of shares that could be bought were limited, so a relative bought the shares in my name.  I was a student at the time.  I don't think I had any income in 1999.  I would have had a small amount of income in 2000 on which I paid PAYE.  I wouldn't have had any income in 2001 (I had a tax-free bursary).

I signed over the Eircom dividend cheques to my relative and signed over the proceeds of the sale of the Eircom shares when it was bought by Valentia.  He subsequently gave me the Vodafone shares as a gift.  

I do not have much (any) documentation about the Eircom shares or dividends.  As I knew nothing about tax at the time, and I didn't consider myself to be the owner of the shares, I did nothing tax-wise regarding the dividends or final buy-out from Valentia.  I have also neglected to do anything tax-wise about the Vodafone share dividends.  I now need to fill in a Form 12 to deal with the Vodafone shares, but I am wondering if I need to go back as far as the Eircom shares and sort them out too.

My understanding is that no CGT was payable on the buyout by Valentia as there was a net loss, due to drop in share price.  

Can you help me with the following questions:
a) Am I correct in saying that there was no CGT to be paid if you bought the shares at the original floating price of €3.90?
b) As the shares were kept until 2000, there was a bonus 39 shares provided.  The base cost of these was €0 (they were given for free as a bonus).  Is CGT payable on these, or is it taken as an overall investment, and does the loss made on the other shares mean no CGT is payable on these shares?
c) Does anybody have documentation from their Eircom share dividends?  Do you know if the dividends were taxed at source, or if they should have been declared for tax purposes (I had no income in 1999 or 2001, but a very small PAYE income in 2000).
d) If the dividend was not taxed at source, could the tax have been written off against the loss in value of the shares?
e) Is there a limit to how far Revenue can go back, i.e., are share dividends from 1999 - 2001 off limits now, or can they still claim the tax from me, fine me for not declaring at the time etc.

BTW, my relative is quite old now and doesn't seem to be able to find the documentation relating to Eircom.  I don't want to go the route of telling revenue that he was the real owner of the shares and that if there is a liability, it should be his.

Thanks for your help.


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## PMU (23 Oct 2013)

The base cost to be used in the calculation of CGT gains / losses on Eircom / Eircell / Vodafone shares is in Revenue tax briefing no 46, downloadable at:
www.*revenue.ie*/en/practitioner/*tax*-*briefing*/archive/tb46.pdf

  From my own records, I can see Eircom paid an interim dividend of 1.6 cents a share on 14 Jan 2000;  and a second interim dividend (known as the ‘Valentia devidend’) of  3 cents a share on 16 Nov 2001.  These amounts are before withholding tax (of 20%?).  There could be other dividends but I’ve no record of them. Associated with the ‘Valentia dividend’ was a payment of €1.335 per Eircom share following Valentia’s offer.


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## CarPark (23 Oct 2013)

PMU, thanks very much for taking the trouble to look this up. 
I managed to turn up two dividend counterfoils from Eircom today.  
- 15 Sept. 2000; 3c/share (Dividend Withholding Tax 20%).
- 16 Nov. 2001; 3c/share (Dividend Withholding Tax 22%).

As the counterfoils mention the DWT and a net dividend payable, does that mean that the dividend has already been taxed, and that no more tax is owed in relation to that dividend?


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## CarPark (23 Oct 2013)

PMU said:


> The base cost to be used in the calculation of CGT gains / losses on Eircom / Eircell / Vodafone shares is in Revenue tax briefing no 46, downloadable at:
> QUOTE]
> 
> Thanks PMU.
> ...


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## Dermot (23 Oct 2013)

Do not forget you have a CGT exemption of approx €1250 per year


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## CarPark (23 Oct 2013)

Thanks.  I didn't know that.


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## PMU (24 Oct 2013)

CarPark said:


> PMU, thanks very much for taking the trouble to look this up.
> I managed to turn up two dividend counterfoils from Eircom today.
> - 15 Sept. 2000; 3c/share (Dividend Withholding Tax 20%).
> - 16 Nov. 2001; 3c/share (Dividend Withholding Tax 22%).
> ...


 I've checked my documentation and I've found counterfoils for 4 Eircom dividends (i.e. 1.6 cents a share on 14 Jan 2000; 3 cents a share on 15 Sept 2000; 1.6 cents a share on 19 Jan 2001 and 3 cents a share on 16 Nov 2001).  Were there others?

Even though withholding tax was applied the dividends should have been declared.

One other issue. Eircom flotation took place in July 1999.  In May 2001 Eircom sold Eircell to Vodafone and investors received Vodafone shares.   Revenue has since determined the base price for these shares at €4.66 a share for the purposes of CGT. For a retail investor the year the expenditure occurred was 1999 and therefore am I correct in assuming that indexation relief should also apply to to the shares for the period up to 31 December 2002, i.e. the shares should be valued for CGT purposes at the Revenue base price multiplied by the relevant indexation multiplier for the period 1999 – 2001?


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## CarPark (25 Oct 2013)

PMU, thanks for getting back.



PMU said:


> Even though withholding tax was applied the dividends should have been declared.


 
Can you explain this?  In particular, is it just a matter that it should have been declared, or did further tax need to be paid on it?



PMU said:


> One other issue. Eircom flotation took place in July 1999. In May 2001 Eircom sold Eircell to Vodafone and investors received Vodafone shares. Revenue has since determined the base price for these shares at €4.66 a share for the purposes of CGT. For a retail investor the year the expenditure occurred was 1999 and therefore am I correct in assuming that indexation relief should also apply to to the shares for the period up to 31 December 2002, i.e. the shares should be valued for CGT purposes at the Revenue base price multiplied by the relevant indexation multiplier for the period 1999 – 2001?


 
I don't know, but as something is happening with the Vodafone shares now, revenue may issue guidelines.....


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