Taxes Consolidation Act 1997 section 848AA

Tax treatment of return of value on certain shares

Section 848AA provides relief for small individual shareholders in Vodafone plc by treating a return of value of €1,000 or less received in February 2014 as a capital receipt rather than income, unless the shareholder elects otherwise.

• A return of value of not more than €1,000 received by an individual shareholder in Vodafone plc under its 2014 scheme of arrangement is deemed to be the receipt of a capital sum derived from the individual's ordinary shares, subject to CGT rules, rather than income.
• The relief is automatic — the shareholder does not need to claim it — but may be overridden if the individual elects to have the return of value treated as income instead.
• An election to treat the return of value as income is made by including it as income in the individual's tax return for the year ended 31 December 2014.
• Because the base cost of the shares (originating from Eircom shares) exceeded the amount returned, the capital treatment results in no CGT liability for most affected shareholders.