Inheritance

My uncle, who held a substantial number of shares, died before the World Trade Centre disaster. The value of the shares has since dropped but probate tax and capital acquisitions tax (CAT) is calculated on the "date of death" value.

In order not to be at a loss:

1) could the executor retain the shares until they return to the "date of death" value or

2) if the shares are sold at a higher price than the "date of death" value, is capital gains tax due either by the executor or myself as the beneficiary (even though the shares have not been transferred into my name)?

The shares are currently in the name of the deceased, with the executor's interest noted. It is not intended to transfer them into my name.

I should add that I am aware of the capital gains tax allowance of £1,000, which I assume is reduced accordingly because of the short tax year. Therefore, if we need to sell some or all of the shares before the end of the year, your response would be most helpful. The approximate value of the shares at the time of death was £30,000.

Ms M.H., Dublin

Whether the executor can hold on to the shares will be determined partly by the any legal provisions specific to this executorship, although, in general, the timing of the disposal of any asset under executorship would be a matter for the executor themselves to decide.

If the shares are sold by the executor before being transferred to you, the executor will be liable for any capital gains tax. Naturally, that would come from the estate. On the other hand, if sold by you as beneficiary, the tax bill would fall on you. One factor to consider is that an executor sale of the shares might not qualify for the personal capital gains tax allowance.

Bear in mind that many markets and shares have recovered to their pre-September 11th level. It's not a given that you will be nursing a loss; it all depends on the make-up of the portfolio.

Incidentally, you should be aware that probate tax is no longer payable on deaths after December 6th, 2000.

You don't actually say when your uncle died but the reference to "before the World Trade Centre disaster" implies it was some time this year, meaning the tax would not apply.

Eircom

In July, you wrote about the revised cost basis for the Eircom shares following the sale of Eircell. Has there been any advance on an agreed figure from the Revenue since then?

Mr D.T., e-mail

Put simply, no. It seems quite incredible that as we come to the end of the current tax year, the Revenue has yet to specify the figure at which it will be determined the shares in Eircell/ Vodafone and Eircom traded on the first day following the demerger.

After all, it is now six months since these shares traded. If one were to be as tardy in making returns to the Revenue, one would be facing a substantial bill for penalties.

It is annoying that one cannot make a decision on this, as investors try to plan financially by availing to the full of their annual capital gains tax allowance.

Foreign banknotes

I refer to your recent reply regarding the conversion of non-current banknotes from other European states. I recently visited the foreign exchange desk at the Central Bank. They were happy to change current German and Italian paper money into pounds. However, in the case of non-current German and Italian paper money, they were not. Instead they gave me the address of the German and Italian central banks in Frankfurt and Rome and suggested I change the out-of-date money when I next visit these countries. Perhaps you could pass on this information.

Mr R.F., e-mail

Quite what the chances of the public knowing what to do with their old banknotes during the euro changeover are when the Central Bank itself seems muddled on the subject is a mystery. The reply to which you refer was to a man in Galway, who had non-current deutschmarks, lira and Swiss francs.

It was the Central Bank that told me it would exchange these notes, or at least those from states within the euro zone - the Swiss francs, it acknowledged, would have to be returned to banks in Switzerland.

The position as stated to you - that they will only exchange notes currently in use - makes no sense. After all, ordinary banks will do the same, albeit at a price. The point of the original question was that the retail banks had turned down the Galway man because the notes were not currently in circulation.

Anyhow, having checked back with the Central Bank, it appears it will not accept notes that are no longer legal tender in their own country of origin. Indeed, they were not sure whether the central banks of the respective countries would honour such notes.

From personal experience, I can attest to the fact that, in Italy, any bank, not just the central bank, will swap an out-of-date lire note for a currently valid one.

If you are indeed stuck with notes that are no longer legal tender and cannot be exchanged here and are from countries that you are not likely to be visiting again shortly to redeem, several readers have suggested that they might be donated to charities - a number of which are looking for unwanted currency in the run-up to the euro changeover.

Property

I have a house rented in the Republic and I pay tax on the rental income. A year ago I borrowed to buy a small house in England that has, for many reasons, been vacant and without tenants for the past eight months. Is it possible for me to write off the losses of this house in England against the income of the house here to reduce my tax liability?

Mr J.H., e-mail

The advice I have from the Revenue Commissioners is that these two properties fall under different tax headings and therefore the losses incurred on the one could not be set against the other. However, it is a very particular point of tax law and I would advise you to get professional advice from an accountant, specialising in property investments.

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.