No new Membership Certificates have been issued since January 1998.
Private individuals could have acquired Helsinki Telephone E shares in a number of ways. They could have purchased them through normal stock trading or subscribed for them in the share issues of 1997 and 1998. In the membership issue of 1997 the members of Helsinki Telephone Association were entitled to subscribe for 10 Helsinki Telephone shares per Membership Certificate. The subscription price in the issue was FIM 55 per share. It was also possible to subscribe for more shares than a member's number of Membership Certificates entitled to. In such case, the subscription price was FIM 85. The subscription price in the employee offering organised in the same context was FIM 77. In the 1998 share offering, the subscription price was FIM 215. The E shares of Helsinki Telephone were converted to Elisa shares by using the conversion rate of 2.16204.
A private individual has bought a Helsinki Telephone Association Membership Certificate in 1980, and paid FIM 2,750 for it. The actual purchase price is thus EUR 3.08. The person sold 150 shares for EUR 8.00 ß piece on 10 October 2003.
The first method: The actual purchase price: The capital gain is EUR 8.00-3.08= EUR 4.92 per share, i.e. EUR 738 for the whole lot of shares. The tax is 30% of the total capital gain, i.e. 30% x 738=EUR 221.40.
The second method: Deemed acquisition cost: The Membership Certificate has been bought more than ten years before the selling date. 40% of the sale price can be used as deemed acquisition cost, in other words, 40% x 8.00=EUR 3.20. The capital gain is thus EUR 4.80 per share, i.e. EUR 720 per the whole instalment of shares. The tax is 30% x EUR 720, i.e. EUR 216.00.
Using the deemed acquisition cost method in our example means more favourable taxation.
Example # 2:
In the 1997 IPO, a private individual subscribed for 10 shares ß FIM 55 per share, which is FIM 550 in total. When translated this into current shares, 10 old E shares is 10 x 2.16204, i.e. 21 shares. Their acquisition cost is therefore FIM 550, i.e. EUR 92.50, which is EUR 4.40 per share. For example, if the individual sold his shares for EUR 8.00 per share on 10 October 2003, the capital gain can be calculated in two ways.
The first method: The actual acquisition price is used; the capital gain is then EUR 8.00-4.40= EUR 3.60 per share. In this case, EUR 75.60 per 21 shares. The capital gains tax payable is 26% x 75.60=EUR 19.66.
The second method: The 20% deemed acquisition cost is used. The ownership period of the shares is less than ten years. In this case the deemed acquisition cost is 20% x 8.00= EUR 1.60. By using this calculation method, the capital gain is then EUR 8.00-1.60= EUR 6.40 per share, i.e. 6.40 x 21= EUR 134.40 for the shares. The tax would amount to EUR 34.94.
In this example, using the actual acquisition price will be more favourable in taxation.