Q&A

Dominic Coyle answers your questions.

Waiting for that demutualisation

I have maintained a savings account of over €20,000 in the Irish Nationwide Building Society for over 25 years - waiting for the bonanza of demutualisation.

Please advise on the present status of the long-awaited move by the building society. Is it worth waiting much longer? I am now 74.

What are the expected benefits (for those legally accepted investors), if any. I am advised that those with €20,000 or more invested will get bonuses of €7,000 if and when demutualisation takes place. Is this correct?

Ms C.C., Dublin

On the very day your letter crossed my desk, the Cabinet was discussing the proposed building societies legislation.

The Bill has since been published and is now expected to pass through the Oireachtas before the summer recess.

That would allow Irish Nationwide to demutualise in the second half of the year. However, no-one is going to get any payout at that point. The windfall will only materialise when the society is subsequently sold to one of several suitors understood to be running the rule over Michael Fingleton's operation.

Such a sale is expected to take place in the latter part of 2006 or the first half of 2007.

Having waited 25 years, I would suggest it is certainly worth holding on at this stage.

As to the expected benefits, everyone is being slightly cagey on this point at the moment. However, Mr Fingleton did concede this week that he would be disappointed with a sale valuation that resulted in payouts to the society's members of less than €10,000.

Irish Nationwide deposit accounts

I have two deposit accounts with Irish Nationwide. Will I be eligible for a windfall when they demutualise? I do not have a share account. I was not aware of these accounts. Perhaps you have some information on all details relevant to the demutualisation.

Mr D.F., e-mail

There is plenty of information about on the eligibility requirements for membership of the Irish Nationwide Building Society and, consequently, for any future windfall.

The bad news, from your point of view, is that deposit account holders do not qualify for a payout. Only customers with share accounts are formal members of the mutual society and, understandably, only members are in a position to benefit from the sale of what is effectively their asset.

The situation is somewhat complicated by the fact that the many different types of account offered by the society over the years have a range of names, not all of which clearly identify them as either share or deposit accounts. For instance, one of the society's current offerings is the Commercial Fixed Term Share Account, which, despite its name, is a deposit account and not a share account.

Last February, the Irish Nationwide says it issued account statements to all customers updated to the end of 2005. These statements described accounts as either "statement of balance - share account" or "statement of balance - deposit account", thus clarifying the position on membership.

Anyone who is still unsure of their position - either because they do not still have the statement or did not receive it because they have moved address without notifying the society, can clarify their position by writing or e-mailing the society's secretary at the Irish Nationwide's head office or at secretary@inbs.ie. You can also get more information in the Frequently Asked Questions (FAQs) section of the group's website www.inbs.ie.

Investing in life assurance policy

In June 2000 I invested in a single premium life assurance policy. Recently, I surrendered this policy and made a profit of several thousand euro. Is it a requirement that the proceeds are declared for income tax/ CGT purposes?

Mr J.H., Limerick

Exit tax at 23 per cent will have been deducted when you surrendered the policy and this covers your tax liability. There is no further exposure to income tax or capital gains tax, although you may face some liability to the healthy levy and should therefore note the details on your annual tax return.

• Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier 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.