Another 1,300 letters from Irish shareholders in Standard Life have been discovered weeks after a shareholder payout to which they related was concluded.
More than 5,000 Irish shareholders now face tax bills, in some cases running into thousands of euro. An ongoing investigation by An Post and Royal Mail has yet to explain after seven weeks how a straightforward postal exercise went so badly wrong.
Two large batches of mail from Irish shareholders have now been found rather than a steady stream of delayed letters. That points either to a problem with misdirection within the postal system or a failure somewhere along the line to process the letters in the manner expected.
The vast majority of the letters were in special prepaid international business reply envelopes, designed to streamline the process. However fewer than one in four of responses from Irish shareholders arrived within the four-week window for investors to choose how to receive their money.
The failure of the letters – some posted over a month ahead of the deadline – to arrive in time means about 5,300 Irish shareholders of Standard Life have been deprived of the opportunity to secure a more advantageous payout.
Standard Life announced plans last year to return money to shareholders after it sold its Canadian business.
In February, the Scottish insurer sent out notices to all shareholders, including about 60,000 in Ireland, asking them to choose how to receive their money – amounting to 73 pence sterling (€1) for every share held.
Shareholders could choose to have the money paid as capital, which, for investors on the higher income tax band, would mean a lower tax bill, if any at all.
The average Irish shareholding was about 675 shares and, for those in that position, no tax would be due as the payout was below the annual capital gains tax exemption.
Shareholders who did not specifically choose the capital option received a special dividend, which is liable in Ireland to income tax, universal social charge and, potentially, PRSI.
Standard Life has confirmed that those replying by mail, and online, chose the capital option. It also acknowledges that most of the delayed letters were posted well in advance of the deadline. However, the late arrival of their communications mean they have been paid a special dividend and face a significant tax bill.
“We have received reassurances from the postal services there are no more large batches [of letters missing],” a Standard Life spokeswoman said yesterday. “However, we are aware that a small number of forms still appear to be missing in the mail.”
