Different taxes cannot be offset

Q&A: I invested in the Quinn Life Euro Equity Bond in March 2000, an adventure that is currently showing a loss of over €20,0000.

However, I have had better luck with my Iseq shares. If I cash in the lot now, can I offset the capital gain on the shares against the loss on the bond?

Mr J.F., Wicklow

Would that you could but, in this case, you will not be allowed to offset the loss on the bond against the capital gain on your separate investment in shares in the Irish market.

The problem is that you are talking about two tax headings. Put simply, in general you are allowed offset a capital loss against a capital gain - but only if both come under the capital gains tax regime.

For instance, a loss on an investment in shares, art or even a holiday home would be allowable against capital gains as a gain on such investment would also be liable under that same tax heading.

However, this is not the case with your investment in the Quinn Life bond - or any other bond for that matter. Profit from such investments is taxed under the income tax code rather than under capital gains. As such you cannot offset one against the other.

Irish Nationwide

I have in excess of €50,000 in an investment share account in Irish Nationwide. I left it there on the assumption that I would gain considerably in the even of demutualisation and subsequent acquisition.

I am now being told that all I can expect is the "windfall" sum irrespective of the number of share I hold.

Will I not benefit from the acquisition if and when it comes or should I take most of it out and invest it elsewhere?

Mr T.O'B., email

There is a confusion between two things here - your investment and your membership rights. The €50,000 you hold in this account is an investment, earning whatever the current rate is.

For the purposes of demutualisation and any subsequent sale of the society, however, the thing works differently. In essence, your €50,000 "qualifies" you as a savings member.

You will qualify for a windfall as a savings members - the amount in the account is irrelevant as long as you qualify . You could probably qualify for a second windfall if you hold an outstanding mortgage with the Irish Nationwide.

The threshold necessary to qualify is different depending on when you opened the account and the type of account. In general terms, recently opened accounts with Irish Nationwide need to contain €20,000 to qualify . The threshold on older accounts is considerably less and the type of account you mention would appear to fall under this older category. I suggest you check with the society secretary on the relevant threshold for the account you hold.

Once you have that information, you should allocate the remainder of your €50,000 -plus where it will receive the best return in line with your savings objectives.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.