Taxes Consolidation Act 1997 section 847C

Tax treatment of return of value on certain shares where shareholders affected by postal delays

Section 847C provides relief for Irish shareholders in Standard Life plc whose elections to take B shares in connection with the company's 2015 return of value were received late due to postal delays, ensuring the return of value is treated as a capital payment for CGT purposes rather than as income.

• In March 2015 Standard Life plc carried out a return of value to shareholders by issuing fully paid bonus C shares and paying a dividend on those shares, with shareholders given the option to elect to take B shares instead.
• Irish shareholders whose election forms were received by the company after the 4.30 pm deadline on 18 March 2015 would ordinarily have had their return of value treated as income rather than as a capital receipt, resulting in an income tax liability instead of a CGT liability.
• The section deems the return of value received by an affected shareholder to be a capital sum derived from that person's ordinary shares in the company, and not to be income, thereby bringing the payment within the CGT regime.
• The relief applies only where the shareholder proves to Revenue that the election form was completed and signed before the deadline and was received late solely because of delays in the postal system.