Please send your queries to Dominic Coyle, Q&A, The Irish Times, 11-15 D'Olier Street, Dublin 2, or e-mail to dcoyle@irishtimes.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.

Selling piece of family property

I am a widow approaching 80. I reside alone in the family home - a fourbed detached residence standing on approximately one-eighth of an acre alongside a busy road. I have been asked several times to sell a site on part of the land. We did have outline planning permission in 1974 for a large house on one site but it has not been renewed and has lapsed. If I were to sell a site, how much does the State take? Is it better to wait until my death to sell the house and garden together? I have no desire to leave my home as long as I can look after myself. If I become infirm, naturally all must be sold to pay for my maintenance in a nursing home. I have five adult children.

Mrs C.M., Dublin

The simple answer is that the State will charge a tax on the capital gain that you make from the land sale. Although the sale of the principal private residence is not liable to capital gains, any portion of that residence or the land attached to it which you hive off and sell will become liable.

The good news is that the capital gains tax on such a sale has been reduced. Until the last couple of years, such land would have been classed as development land and liable for tax at the higher 40 per cent rate. Now, however, the tax rate has fallen to 20 per cent in line with the capital gains tax rate on all other assets. The aim is to encourage people to make land available for development to ease the current housing crisis.

The 20 per cent rate is worked out on the difference in the value of the land now and when it was bought. The original value of the land is multiplied by an indexation factor to allow for inflation and, if it were bought before 1974, its value is deemed to be the value in 1974.

I know you are only talking about part of the property but that will have to be worked out in the same way - what would it have been worth in 1974, etc.

As to whether it is a good idea to sell now, or whether to wait to sell the whole property when you die or if you need to go into a nursing home, that is really up to your personal circumstances and those of your family. If you wait until you die, the property might pass to some or all of your children, depending on your will. At present, they could each inherit up to £300,000 (€380,921) without facing an inheritance or capital acquisition tax bill.

However, that would take into account any inheritance, they may have received from their father. Depending on the property's value and on any other assets you might bequeath to them, they might face no tax bill on its receipt or sale, unless of course, the property increased in value between the time they received it and the time it was sold on.

However, if they are adult and independent, your first concern should be yourself and your own income needs. If releasing the value of part of the property would allow you to do the things you want, I see no reason why you shouldn't.

You would, of course, still have the house and remaining land to sell at a later stage or upon death.

Deciding when to sell shares

My husband and I own several thousand shares in a property company (Dunloe Ewart) which proposes to go private. Would it be in our interest to accept their offer of 37 cents in cash and 10 cents in loan notes to be redeemed over three years, or wait until five years have elapsed when we will be given a new opportunity to sell? We bought the shares at 24p. My husband is in his late sixties and I am in my early sixties.

Mrs E. M., Monaghan

As any regular reader of this column will be aware, I am neither qualified nor entitled to offer an opinion on a specific course of action in relation to investments. However, I can point out some of the issues you should consider in making any such decision. First is the point that it is not a simple either/or situation. It may happen that the board of Dunloe Ewart does not win approval for its proposal to take the group private, in which case you return to the normal situation with equity investors of selling or holding on to your stake depending on your perception of the value of the current market price and the prospects for the company and your investment in it.

Secondly, there is nothing to say that ownership of the company may not change whether it stays public or goes private. That also would alter the five-year moratorium on selling your stake should it be in private hands.

Aside altogether from the options for the fate of the company, you need to examine your own circumstances. Equity investment is always a gamble even if the return on average has historically been higher than for other forms of investment. The gamble is higher the more you limit your portfolio and when you get down to talking about the outlook for a particular stock, the odds are higher still.

So the first thing you need to decide is how comfortable you are with the idea of risk. In general, as one gets older and other sources of income are fewer, one tends to opt for a less risky investment approach than previously but that is a very individual thing, depending on circumstances.

The shares were 24p or almost 30.5 cents when you bought them but you don't say when that was. The offer from Dunloe is 37 cents plus 10 cents in loan notes redeemable in three years, making it 47 cents. However, it does lock you in for five years and, as we have recently discovered, even five weeks can be a long time in stock markets.

At present, the stock is worth 38 cents in the open market where, like a host of other second-line stocks, it has been suffering since the introduction of the euro zone as the major institutional investors hunt farther afield for value and size.

Depending on your attitude to the risk element, it ultimately comes down to your belief in the current management, who will be running the company over the next five years if it goes private. You need to evaluate how this team has done to date and whether it offers enough to make you confident the value of your investment will be higher in five years, assuming the move to go private succeeds.