Taxes Consolidation Act 1997 section 847B

Tax treatment of return of value on certain shares

Section 847B provides relief for small Vodafone plc shareholders who inadvertently became liable to income tax, PRSI and USC on a return of value in February 2014, by treating the receipt as a capital sum subject to CGT rules instead.

• Where an individual shareholder received a return of value of €1,000 or less from Vodafone's C share special dividend in February 2014, the receipt is deemed to be a capital sum for CGT purposes rather than income.
• Because most affected shareholders originally acquired their Vodafone shares in exchange for Eircom shares in 2001, the base cost of the shares exceeded the return of value, resulting in no CGT liability.
• An individual may elect to have the return of value treated as income instead, by including it as income in the tax return for the year ended 31 December 2014.
• The section was inserted by section 48 of the Finance Act 2014 to address the position of small shareholders who did not understand the choices available to them and inadvertently chose the income option, creating an unintended tax liability.