Standard Life recently wrote to shareholders regarding a distribution they will be making in April following the sale of their operations in Canada.
These payments will automatically be regarded as earnings subject to income tax unless the shareholder instructs Standard Life otherwise. This income option may expose shareholders to an income tax charge of up to 51%.
The alternative is for this income to be taxed as Capital Gains Tax. There is an annual exemption from Capital Gains Tax of up to €1,270 for any gains received on the sale proceeds of a capital asset.
Many Standard Life shareholders received their shares free in 2006 when the company demutualised and listed on the London Stock Exchange. The average award for a shareholder was 673 shares, which will qualify, for an estimated payment of £491, which is circa €660.
Standard Life will only allow the capital gains option on this €660 payment for those who request it by 4.30 pm on March 18th. In their recent correspondence there is an Election Form. To avail of the capital gains option – You need to complete Step 1 – put ALL in the box and sign. The form needs to be returned in the prepaid envelope enclosed.