Q & A

I write in relation to the entitlement of joint account holders at First National Building Society to free shares. Following recent enquiries, I was made aware that, in the event of the death of the first-named holder of a joint mortgage account, the second-named was entitled neither to vote on the demutualisation nor to receive free shares. This runs contrary to the rules in relation to joint investment accounts. How is this so?Mr D.D.B., emailAs always in these things, there is some good news and some bad. It appears that while second-named joint investment account holders are provided for under section 101a of the Central Bank Act 1997, known apparently as the Widows' Amendment following the furore over the issue at the time of the Irish Permanent flotation, the same is not true for joint mortgage account holders.It should be noted that, certainly in recent years, most joint mortgage accounts would be paid off under life assurance provisions taken out at the time of the mortgage, ensuring that the issue does not arrive.However, in cases where this doesn't apply, the society has told me it will recognises the rights of the second-named joint mortgage account holder to vote (no longer an issue following the recent annual meeting which approved the move) and receive free shares provided that the first-named account holder died before December 31st, 1997 and that the second-named account holder fulfilled all the other criteria for eligibility - length of membership and minimum £500 balance of the mortgage account from December 31st, 1997 to the date of the vote last Monday. This situation arises because the first-named account holder, having died before December 31st, never received the rights to vote or receive the shares, these rights only being conferred subsequent to that date. In cases where the first-named account holder was alive on December 31st last, but died subsequently and the mortgage is not redeemable via life assurance, the rights are deemed to have died with the first-named account holder as they held those rights for a time.Despite the tighter limits introduced in the December Budget, can you confirm that when shares are held in joint names (husband and wife), the capital gains tax allowance of £1,000 will, in effect, be £2,000 in their joint tax assessment? Mr N.P., DublinIn the area of capital gains, the Budget represented an attempt by the Minister for Finance, Mr McCreevy, to effectively end the practice of transferring capital gains tax allowances between spouses, partly because of the perceived inequity in the treatment of non-married couples and more importantly as a quid pro quo for the introduction of a lower rate of capital gains tax.However, as you say, by putting the ownership of the shares into joint names, a couple can, garner the full £2,000 in CGT allowances. The Revenue will apportion the capital gain on the disposal of shares equally between the joint owners. So, in a situation where a husband and wife make a capital gain of £2,000 on shares in this tax year, the Revenue allots £1,000 to each. Where the couple is jointly assessed for tax, this effectively becomes £2,000 for the couple.This applies not only to husband/wife situations but to any relationship which registers its ownership of shares in joint names, although, obviously, the jointly assessed tax element applies only to married couples.In relation to the transfer of shares about which you wrote recently, I understand that there is, in fact, no stamp duty payable on the transaction. Is this the case?Ms B.W., DublinThat is certainly the case. The only charge, the Office of the Revenue Commissioners informs me, is £10 for each transfer with an accompanying completed stock transfer form. The confusion may arise because the transaction is dealt with by the Revenue's stamp branch - according to therevenue information office - but that does not imply any liability to stamp duty. Of course, any stockbroker can also arrange a stock transfer but the charges will be greater.Send your queries to Q&A, Business This Week, 10-15 D'Olier St, Dublin 2, or email to dcoyle@irish-times.ie.