Joe Costello (Dublin Central, Labour)
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Tá áthas orm deis a bheith agam labhairt ar an ábhar tábhachtach seo. My matter concerns the loss of entitlements to more than 5,000 shareholders in Standard Life plc due to inordinate postal delays. It is an incredible situation that approximately 5,300 citizens will incur a tax bill due to delays in our postal service. The United Kingdom insurer, Standard Life, sold its Canadian affiliate and returned payment to shareholders. A large number of Irish shareholders wrote to Standard Life, stating they wanted their payment treated as capital, so as to enable them to avoid paying tax on most or all of the moneys they were due. Otherwise, they would be liable to income tax at the rate of 51% if the payment was not designated as such.

The farcical situation occurred that these 5,300 citizens found the letters to Standard Life did not reach the company on time to have their wishes implemented at the emergency general meeting held to deal with the sale of the Canadian affiliate. One batch of post did not arrive until six weeks after it was posted. Neither An Post nor the Royal Mail has accepted responsibility. Incredibly, there is no traceability of more than 5,000 letters. There is a rumour that they ended up in Roscommon but there is no proof of that. They certainly did not reach the United Kingdom in time. Unfortunately, An Post is immune from all liability for loss or damage arising from any delay in providing a universal postal service under the provisions of section 26 of the Communications Regulation (Postal Services) Act 2011.

As the Minister knows, similar postal delays were experienced when Vodafone returned money to shareholders in Ireland following the sale of its American affiliate. In the 2014 Finance Act, the Minister included provisions allowing for a measure of tax relief to the many thousands of Irish Vodafone shareholders who had a relatively small holding and who, likewise through no fault of their own, found themselves liable to income tax, PRSI and USC, rather than what they expected, namely a zero capital gains tax liability.

I suggest the principle is the same. Irish citizens have lost income due to an inadvertent mistake regarding the return of payment to them after the sale of an affiliate by a parent company. The fact that Vodafone shareholders may have incurred previous losses is neither here nor there. The Minister cannot treat the Vodafone shareholder preferentially and deny the Standard Life shareholder. Both sets of shareholders lost out through no fault of their own. In the forthcoming finance Bill in October, will the Minister consider inserting a provision, similar to that in the 2014 Act, to allow Standard Life shareholders receive a tax relief in a similar fashion, as the same principle underlines this case?

Michael Noonan (Limerick City, Fine Gael)
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I thank Deputy Costello for raising this matter.

My understanding of the background to this issue is that, following the sale of its Canadian business, the UK company Standard Life plc offered its shareholders the option of having the return of value payments due to them treated as income or capital. Treatment as income was decided by the company as the default position in the absence of shareholders choosing the capital option within a specified period, which elapsed some time ago.

It seems that the chosen options posted by quite a number of Irish shareholders in the company were delayed beyond the deadline and that the form in which they then received their payment was not the most tax efficient from their perspective. The Revenue Commissioners have informed me that, from an Irish tax perspective, the position is that, if the Standard Life return of value payment is received as income by an Irish resident taxpayer, it will be taxed under income tax rules. If it is received as capital, it will be taxed under the capital gains tax rules.

Comparisons have been made between this case and one from last year relating to Vodafone shareholders. In last year's Finance Act, I included provisions allowing for a measure of tax relief to the many thousands of Irish shareholders with small shareholdings in Vodafone plc who inadvertently found themselves subject to an unintended liability to income tax, PRSI and USC rather than a nil capital gains tax liability arising from a return of value payment from that company. I did this because the shareholding of many of the Vodafone shareholders arose originally from their investment in eircom from which they continued to carry capital losses. It was in this context that I felt it appropriate to protect these small shareholders in last year's Finance Act from additional cost or losses through a tax liability.

The particular background to the Vodafone case is not a feature of the Standard Life return of value case. Furthermore, it is important to note that the fact that notifications of the options made by some of the Vodafone shareholders were also delayed in the post beyond the deadline date in that case or were not dealt with by the company as shareholders would have wished were not factors in my decision to provide the relief.

Having said that, though, I have undertaken to give consideration to the views and concerns expressed in respect of the affected shareholders in Standard Life in the course of my preparations for the forthcoming Finance Bill, and I will do so. The matter is already receiving attention in this regard.

Joe Costello (Dublin Central, Labour)
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I thank the Minister for attending and for his response. I am delighted that he is considering this issue and that it is receiving attention. I hope he will take steps in the forthcoming Finance Bill to redress this matter. It was brought to my attention by the Standard Life shareholders. They are people, including people from the public sector, who made small investments with their redundancy payments, money they received, lump sums, etc. Due to the Celtic tiger and a number of changes made arising out of the troika's involvement, money became available for investment by small earners, people who would have worked all of their lives and believed their investments were secure. We are not referring to major investors, large sums of money or high flyers.

The Minister's explanation for the principle he established in providing tax relief to those Vodafone shareholders who lost out in a similar way does no justice to that principle. The underlying principle in this case is the same. The Minister stated, "The particular background to the Vodafone case is not a feature of the Standard Life return of value case." The circumstances are exactly the same. I cannot for the life of me see how he could make provision in the Finance Act 2014 yet not make similar provision acknowledging this matter. Doing so would not establish a new precedent, as it would be along the lines of what he Minister had already established.

I hope that An Post and the Royal Mail have learned their lesson. We need to tie down the traceability of all mail and the question of not incurring inordinate details. As to the question of tax relief and redress, though, that matter lies in the Minister's hands only. I hope he will be in a position come the budget and the Finance Bill to respond positively.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Deputy again and will examine the matter sympathetically, but without prejudice, as I prepare the Finance Bill, which is usually published in late October. I have asked officials in my Department and the Revenue Commissioners to examine the matter further in that context and to revert to me. I will make a decision based on the advice I receive from them and on the views that have been expressed to me by Deputy Costello and previously by other Deputies and citizens of this Republic.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank the Minister. He made my job easy.