Jill Kerby

Check the numbers before you sell Vodafone shares

PS writes from Dublin: I am left with about €3,000 worth of Vodafone shares from my – failed - original investment of €8,000 in the Eircom share flotation. Are they worth holding onto and what would the tax situation be if I sold them now? Your advice would be greatly appreciated.

Only you can decide if you have the time and inclination to hang onto your shares in the hope that they may someday reward you sufficiently. If you check Vodafone’s five year share performance on financial websites like Yahoo Finance, you will see that their price has ranged from about Stg137p to171p (as I write) with some huge highs and lows. Over the past 52 weeks alone the range has been between about 154p and 185p.

If you decide to sell your shares, you can offset any loss you’ve made on them against any other capital gains from other shares, less your personal capital gains tax allowance of €1,270.You can carry any remaining loss forward to the next year.

Working out exactly how much of a loss or gain has been made by Eircom/Vodafone shareholders is complicated, because of how a pat of he company was sold off (Eircell) and how bonus shares were also issued at a rate of one Vodaphone share for every two Telecom/Eircell shares held. 

Vast amounts of space have been dedicated to the formulas and calculations on Askaboutmoney.com and other consumer boards, but I suggest you hand over your query to an accountant or tax advisor and let them do hard lifting for you.

GK writes from Dublin: I have become a resident in Ireland for tax purposes.  I own a rental property overseas that has a tax year from April to March.  The tax year in Ireland runs from January to December.  Can you advise how I partition the rental income and expenses across differing tax years and apportion the credit for tax that has been paid in another country that has double taxation agreement with Ireland. Can you refer me to a document that I can use to understand my tax obligations with regard to rental income.

You also need to consult a good tax advisor about your overseas property, its tax treatment here and in the other country and whether your wider tax position also comes into play.

Meanwhile, the Irish Revenue Commissioners produces a useful leaflet, ‘A Revenue Guide to Rental Income – IT 70’ that you can download from its website here: http://www.revenue.ie/en/tax/it/leaflets/it70.html  It should provide everything you need to know about what expenses can be deducted, how profits and losses are calculated, when any tax is due and the records you need to keep. It even includes a section about foreign rents.

KC writes from Co Wicklow: Due to a period of unemployment, overspending and robbing Peter to pay Paul I have a credit card debt of €26,280.26. I have been paying the minimum payment up until November when it became impossible to service the €650 per month. I’m back in employment, as is my wife but we’re struggling with our bills having no money for food near the end of month. On top of a €6,500 overdraft, direct debits are bouncing every month, but we’re still paying the mortgage, though interest only for the past six months.

The credit card has been revoked after I asked the bank to freeze the interest last December. Now they are (finally) offering me three options: to get a loan to pay the balance; send in a budget plan of what I can afford and they will send it to their controllers or make them a settlement offer of 85% of the debt, but the balance will stay on my record as a bad debt for five years.

The credit union will approve a loan for €23,000 and I will then have to find the remaining €3,280. I would appreciate your opinion on these options.

Two financial advisors I spoke to about your debt problem both agree that because your credit record is probably already impaired you should not immediately take the third option and make your card provider the 85% settlement, but rather try to negotiate an even larger write off.

“Your reader stands to lose little by having a worse credit record than he already has,” suggested Karl Deeter of Advisors.ie . “The upcoming Debt Settlement Arrangement which will engage with lenders via a personal insolvency trustee may get him a better result, if he can wait it out until the DSA is in place, probably sometime next year.” 

Vincent Digby of Impartial.ie advisors, also believes the write down “is not a large enough carrot” but thinks you cannot possibly know the true extent of all your debts, arrears and any interest penalties and what you have left to live on every month “until you do a proper and realistic budget for monthly expenditure.”

Even though you are employed again, Digby isn’t convinced that a credit union/bank loan will be sufficient to restructure your credit card debt at affordable monthly repayments given how you are struggling to pay your interest only mortgage, the overdraft AND put food on the table.

“If the sums don’t add up then it may be time to call in MABS and/ or start negotiating with the Bank for a more substantial settlement.”

You should also make an appointment to see your mortgage lender about further forbearance measure for those payments. Good luck.