Q&A

 

An Irish Times guide to the world of personal finance

Eircom

My family holds roughly equal amounts of Vodafone, formerly Eircom, stock split into three lots - myself, my wife (unwaged/homemaker) and a minor child. I have some possibility of having a capital gain, so my shares will generate an allowance against this. My wife has no other assets in her own right, so can the loss in respect of her shares be realised and passed to myself? Similarly can a realised loss by the child be passed to myself?

Mr P.K., Dublin

The loss on your wife's shares can be passed on to you upon disposal, if she cannot use it herself to offset against gains.

You can also transfer shares between you. Share transfers between spouses are not liable to capital gains tax and the shares are deemed to have the same value they did at the time of purchase. So you could either transfer some shares to your wife on which she would be able to realise a capital gain to offset the loss on any Vodafone shares she might currently wish to sell, or you could transfer her holding of Vodafone shares to yourself where, again, they could be offset against some other asset, realising a gain to minimise your capital gains tax bill. Remember, the loss on Vodafone only becomes an issue when you want to sell your holding.

As for the child, the Revenue tells me that there is no provision in the Taxes Consildation Act 1997 to allow a parent use the capital gains tax loss accrued in the name of a child .

SSIAs

Now that a year has elapsed since the beginning of the SSIA scheme, do you know if any organisation has produced (or is planning to produce) a table showing how the various savings institutions have performed?

I have received my statement of deposit account from ACC, which has not felt obliged to pay interest above its committed ECB rate. I believe other institutions, who are committed to pay less than the ECB rate, have actually been paying more. I am tempted to change from ACC.

Mr C.McC., Dublin

I am not aware of any group that has yet put together a performance table on SSIAs, although I imagine that the deposit one would be fairly easy to work out. You are right when you say the ACC - although guaranteeing not to fall below the European Central Bank rate - has not offered anything above that rate either, while certain other institutions have.

You are not likely to see huge changes here until such time as the ECB raises its interest rates. At that point, the guarantees given by ACC, together with Northern Rock and First Active, to match the ECB rate will come into their own. Those institutions offering below the ECB rate may raise their rates as well but not as high as those matching the ECB rate. Those institutions currently offering in excess of the ECB rate will, I imagine, do nothing. Their rates will become gradually less competitive, but they will rely on the fact that everyone wanting an SSIA account now has one as the deadline has passed and inertia ensures that most people won't bother about their progress for the rest of the five-year term.

However, for those interested in maximising their return, like you, there is nothing to stop you transferring your variable rate deposit-based SSIA from one institution to another in order to attract the best rate at any given time. You do have to fill out a form upon transfer, SSIA 6, and you will need to remember to alter any direct debits in such a way as to ensure no missed payments - especially in this crucial first year.

As for checking out who is offering the best rates, I am sure someone will get around to running occasional checks but, in the meantime, I am afraid you are likely to have to ring around the institutions yourself.

Financial advisers

I have about €50,000 to invest and would like to seek the advice of an independent financial adviser. How would I go about finding an independent adviser?

Ms M.E., Dublin

Under a new regulatory system, the Central Bank registers all brokers in one of three categories:

restricted activity investment product intermediaries (RAIPI) - who can advise on and sell products only of the companies with which they have written agencies;

authorised advisers - who can advise on all products;

authorised cash handlers - who, in addition to advising on all products, will be allowed to manage client funds on a discretionary basis.

It appears the majority of the 2,400 brokers have applied for the restricted status, with about a third offering fully independent advice as authorised advisers.

For truly independent advice, you will need to pay up front; otherwise the broker is going to be remunerated by the commission on any products sold and, with the best will in the world, this is open to influence.

The Central Bank has a register of who falls into each category.

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. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.