Under the deal, some £54bn is expected to be returned to Vodafone shareholders through a mixture of a special dividends and Verizon shares. 

However, under American tax law, US sourced income such as interest paid by US companies or dividends is taxed at source at 30%.

This means Verizon share certificate holders would be liable for 30% tax on the income from selling their share.

Investors who hold shares via a qualifying intermediary (QI) such as Hargreaves Lansdown are however eligible to pay a lower rate of tax.

Danny Cox of Hargreaves Lansdown said: “Those who hold shares in a self-invested personal pension (SIPP) pay 0% as the US tax authorities recognise SIPPs as a tax efficient savings vehicle. However, the US does not recognise ISAs so ISA investors still have to pay 15% tax on any income.”

Basic rate taxpayers also qualify for the reduced 15% rate, however they will still have to go through a QI. They have to complete an IRS W-8BEN document, which is valid for three years.

Higher rate taxpayers also have to pay additional tax liabilities.

Cox said: “In order to mitigate the higher tax liability, individual shareholders can – if they still have their yearly allowance left – bed the shares within an ISA or a SIPP, taking note that the latter allows you to pay 0% in tax.

“If they have used up their respective allowances, there is very little else they can do. One option is to sell their Vodafone shares before the Verizon share certificate issue, but obviously they will have to weigh up which route is more likely to give you the best return.”