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.

SSIAs

Could you tell me what ethical fund options are available for those investing in special savings incentive accounts (SSIAs)?

Mr D.H., e-mail

There has been an increasing interest among potential SSIA savers in ethical or socially responsible investing. However, Ireland has not shown quite the same enthusiasm for ethical funds, and has been the poor relation when it comes to the current enthusiasm for ethical funds. As of now, the only ethical fund option for those investing in special savings incentive accounts is the Friends First stewardship ethical fund.

Eircom/Vodafone

What is the assumed cost basis for the Vodafone shares received as a result of the demerged Eircell business, for capital gains (or loss!) tax purposes. Also, is there a revised cost basis for the original Eircom shares?

Mr B.W., e-mail

The truth is that the companies have yet to work out precisely what the figure will be for the shares in either company but first let me explain for other Eircom shareholders, who may not be familiar with revised cost bases, the reason for the question.

When people bought their shares at flotation a couple of years ago, they paid €3.90 per share. That share represented a stake in the Eircom group, including all its businesses, such as Eircell.

When someone went to sell their shares, they were readily able to tell how much of a loss or gain they had made on the transaction - you simply subtracted the sale share price from the buying price and adjusted for expenses, such as stockbrokers' fees.

When Eircell was sold to Vodafone, it became more complicated. Anyone now selling their shares - either the rump Eircom shares or the Vodafone ones they received for Eircell - has to work out what portion of their initial investment relates to what is left of Eircom and what is represented by Eircell. Otherwise, you would never calculate your capital gain or loss on the deal and so your tax liability, if any, to capital gains tax.

Basically, one has to work out the proportion of the original stock now owned by each party on the basis of the price at which they traded in the market on the first day after the sale of Eircell to Vodafone.

This is further complicated by the fact that both the new Eircom and Vodafone traded in a range of prices on that day - May 14th last. Eircom traded at between €1.05 and €1.14 and Vodafone at €1.56-€1.48666 (allowing for conversion from sterling at the prevailing rate on the day). The respective company share registrars, who deal with such things, are now consulting the Revenue Commissioners over what price will be considered for the purposes of revising the cost basis of each element of the original purchase.

I am told by PricewaterhouseCoopers that when the figure is agreed by the Revenue, it is likely to be published in the media for the information of shareholders of both companies.

For the purposes of illustration, let us assume the given price will be the mid-point in the trading range on May 14th. For Eircom that would be €1.095; for Vodafone, it would be €1.5233. Let us also assume the shareholder in question bought the shares at the flotation price of €3.90.

First add the two mid-point prices (1.095 + 1.5233 = 2.61833). Now work out what each is as a percentage of that total figure. (1.095 x 100 2.61833 = 41.82). So the Eircom shares you still hold, which represent those parts of the group other than Eircell, amount to 41.82 per cent of the overall value of the original shares. It follows that the Eircell part of the company, now represented by the Vodafone shares you have received, accounts for 58.18 per cent.

Turning to your original flotation price of €3.90, that means Eircell/Vodafone accounts for €2.269 of the price and the new Eircom accounts for €1.631. The proportions would be the same whatever prices you bought the shares at.

So if you wanted to sell the Eircom shares - say at the €1.27 cash price on offer from Sir Anthony O'Reilly's Valentia consortium - you would quickly be able to determine that you had lost 36.1 cents per share (1.631 1.27 = 36.1).

Of course, you need to remember that this is simply an illustration and that the actual revised cost basis has yet to be agreed with the Revenue.

But the calculations are the same and, at least when the official figure is announced, people may understand how it works and what is its import.

Currency transfers

I would like to send a gift to a Russian friend of around £500. How can I do this legitimately, safely and securely? Should I send US dollars or would a pound bank draft be OK?

Ms V.C., e-mail

There are never any guarantees but your best bet is probably a bank draft. When it comes to currency, the pound is a perfectly honourable option, but I do think you might find less trouble with a dollar draft, despite the hassle this might cause you with exchange rates and commissions.