Q&A

Dominic Coyle answers your queries

Standard Life's discount shares

I got free shares recently from Standard Life. I also got an offer of buying further shares at a discount in the company. Do you think I should invest in these shares?

Mr D.O'B., e-mail

The first thing to make clear is that I am very constrained in giving detailed opinions in situations like this. The financial regulator would take a very dim view of unregistered and unqualified people dispensing specific financial advice of this nature through this column.

Having said that, there are a few things that can be said. Firstly, you should be aware that the flotation price of the company has already been reduced amid recent stock market volatility. That would seem to indicate, at least in part, that the company and its advisers think they could trade up to a higher price if market calm was to be restored.

Secondly, you are being offered shares at a discount to the market price which, all things being equal, would indicate some room for growth . . . at least in the short term.

As a member of what has been a very successful mutual society, you probably know the company's strengths (and weaknesses) better than me. Financial services are generally a strong area in equity markets but listed insurance companies are very different to listed banks.

Share bonuses not always good value

Do you have an opinion on whether to sell or retain Standard Life shares due to be issued next month? There is a 5 per cent bonus scheme payable in shares for retaining them for 12 months.

Ms P.McG., e-mail

The caveats above again apply. I am not in a position to provide specific advice. The one additional thing I would say is that the 5 per cent bonus offering is attractive only if the underlying company is an attractive prospect as an investment. Remember the experience of Eircom. There is no point holding on to a poorly performing stock purely for the bonus. A company may have lost considerably more than 5 per cent if the market goes against it in that period of time.

SSIA eligibility for student living in UK

My SSIA is about to mature in November. I started college in the UK in October 2000 for five years and came home every holiday period. In total, I was home about six months and in college for six months. I am hearing conflicting views concerning my entitlement to the SSIA. When I joined, the bank manager assured me I was okay and would be resident despite being in the UK. I became formally resident in the UK in July 2005 after finishing college. Am I entitled to the SSIA?

Mr D.R., e-mail

I am not surprised you are hearing conflicting views; your situation does not fit neatly into one's perception of location.

However, I don't think you will have anything to worry about when it comes to drawing down your mature Special Savings Incentive Account (SSIA) in November.

The underlying cause for concern is clearly the fact that you have been out of the country for so long. The SSIA rules say that you have to be resident in the State for tax purposes in order to open an account and must remain resident or ordinarily resident - a concept readers of this column must, by now, know by heart - in order to remain eligible.

What works in your favour are the details of the rules on residence. These state that a person is resident in the State if, in any given calendar year, they are physically present within its borders for 183 days. (For what it's worth, it counts as a day if you are here at midnight on a given day, regardless of what you do for the other 23 hours).

On that basis, you might be borderline as regards eligibility but, as it happens, the Revenue also has a secondary provision. If, over two succeeding years, you spend 280 days in the State, you are also deemed to be resident.

By that measure - equivalent to 20 weeks, or less than five months a year - you seem to qualify comfortably, at least up to July 2005.

And, at that stage, the provisions of ordinary residence will ensure you are still eligible to benefit from your SSIA when it matures later this year.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 10-16 D'Olier Street, Dublin 2 or by e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.