Mr. Charlie Phelan:

We do not think it is a change of policy. It is a generally accepted principle that if one gets money for something, then that forms part of one's trading income and as such should be included in one's trading profit and loss account as sales. If somebody gets something as well as money, then that should also be treated as income.

In fairness to the entire examination of the area, we were not aware of the patronage shares until recently. This started from people valuing shares at par when they, say, transferred to them, sold by them or if they died, until we realised there was a grey market. Some people would pay the CGT, capital gains tax, correctly on the grey market rate at which they sold them. Others were putting the proper valuation when they inherited the shares. It was only in the past 18 months that we discovered that the valuation around co-op shares, as distinct from the PLC shares, was an issue for us on the CGT and CAT, capital acquisitions tax, front. Recently we realised that, in addition to getting paid for milk, farmers were also getting the option to buy patronage shares at a value of €1.25. In an area where there is a grey market, our technical view is that the value of the share that one is buying should be included in one's trading account. I accept there is a difference in the technical view.

As regards the capital gains tax issue, if somebody has disposed of these shares and has paid capital gains tax, we will correct that. There may even be repayments. For example, if someone has a marginal tax rate of 20%, sold the shares and paid tax at 33%, clearly there is an overpayment and will fix that for them.