British insurer Standard Life says it can do no more to help more than 5,000 Irish investors left with a tax bill after a postal blunder undermined its £1.75 billion payout to shareholders.
In a letter to almost 5,300 shareholders, the listed group says it is now effectively up to them to do battle with the Irish Revenue.
“Very regrettably, I believe we have exhausted all of the courses of action open to us,” the letter states. “If this situation has any impact on you, it is now a matter which you will have to take up in your personal dealings with the tax authorities in Ireland.”
Personal intervention
However, in the same letter, Standard Life acknowledges that, despite the personal intervention of its chairman Sir
Gerry Grimstone
, the Revenue has said it has no discretion to waive the tax bills due – amounting to around half the payout for each of the affected shareholders.
The Standard Life boss has been similarly unsuccessful in finding out where the letters were held up despite speaking to An Post chief executive Donal Connell and Royal Mail's outgoing chairman Donald Brydon, the letter admits. The postal services have conceded the fault lies somewhere in their systems.
The company was giving money back to shareholders following the sale of its Canadian business for £2.2 billion late last year in an exercise that also saw it implement a consolidation of its shares so that investors received nine new shares for every 11 previously held.
The payout amounted to 73p (almost €1) per share. The average holding of Ireland’s 60,000 Standard Life shareholders is 675 shares. Some hold considerably more, and many of those were among the 11,200 who contacted the company to elect to receive their payout in a way that would ensure they paid little or no tax on it.
However, fewer than one in four of those who sent their replies by post met the deadline. Standard Life accepts all the letters were posted well in advance of the deadline.
Cannot reverse process
In the letter to Irish shareholders, some of whom were left with a bill of several thousand euro instead of a tax-free payout, the company says it cannot reverse the process governing how the money was paid out.
The letter says the company is also aware that the matter has been raised in the Dáil but that the Minister for Finance, Michael Noonan, had said that he did not feel it was appropriate for the State to take steps to help the affected shareholders in the same way it did last year with Vodafone shareholders.
The company had previously issued the letter to a number of Irish investors who contacted it directly, but has now decided to mail all of the 5,300 out-of-pocket shareholders from whom it has not yet heard.
