Personal Finance Q&A

Your queries answered

How can I gift shares without brokers’ fees?

Q

My mother passed away in August 2009. She was the holder of a small number (34) of Vodafone shares. We have looked at the option of transferring these shares to one of the charities she supported. However, as the cost of the stockbroker’s fees are greater than the value of the shares, the charities I contacted are not in a position to accommodate this request.

Surely there must be lots of people in this situation, where a holder of shares dies and it’s left to the executor to dispose of them. Would you have any advice or suggestions on what I could do?

– Ms EC, e-mail

A

You are not obliged to use a stockbroker in order to transfer shares from one party to another. You need to fill out a stock transfer form – available from a legal stationers, and possibly from stockbrokers, solicitors or banks – and return it to the Revenue’s stamping office.

A helpful guide through the process is provided by share registrar Computershare at url.ie/cqs7.

In terms of cost, you or the estate will be liable for stamp duty which, I believe, is 1 per cent of the value of the transaction.

There should be no liability to pay capital gains tax in the case of an executor’s transfer.

How much to put savings in brother’s UK account?

Q

To help allay my fears about the euro and other economic uncertainties, I was hoping to transfer my savings of €15,000 to my brother’s bank account in the UK. Are there any tax or other issues I should be aware of when sending it to him, or when I take it back, perhaps some time next year?

– Mr DP, e-mail

A

The two main issues that spring to mind are the foreign exchange risk that you are opening yourself up to, and then the possibility of having to deal with capital acquisitions tax.

On the tax side, in the literal sense you are “gifting” your brother the €15,000 (as it effectively moves into an account in his name) and he eventually “gifts” it back to you. That could trigger a taxable event for you under the capital acquisition tax rules here when the money is returned.

The threshold for gifts and inheritances between siblings exempt from the tax is currently €33,208. Clearly, this sum is below that but you would need to take into account any other inheritances or gifts previously received from family other than parents.

You must also consider the possibility of exposing your brother to gift tax under UK rules.

From your brother’s perspective, there are further issues. In the first place, the UK tax on savings is higher than here – 20 per cent is automatically deducted at source but if you pay a higher rate of income tax, you have a liability to return the balance to the Inland Revenue.

While opening a UK bank account from here is not a trouble-free process – and only some institutions are prepared to countenance it – it ultimately sounds like a cleaner solution if you really do want to move some of your savings out of the euro zone.

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.

Please send your queries to Dominic Coyle, Q& A, The Irish Times, 24–28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com