Jill Kerby's MoneyTimes - February 29, 2012

Posted by Jill Kerby on February 29 2012 @ 09:00



March 1 is an important day for any parent who wants to keep private health insurance cover for their families.

Last week, a very upset mother explained what can happen when the cost is prohibitive.

Her baby had glue-ear. A “very common” condition, she explained on a national radio station last week. Usually, a minor corrective treatment involving the insertion of grometts and a period of ‘watchful waiting’ will do the trick.

For some children, however, an operation may be necessary, especially where hearing loss is more serious.

In the case of this child, it took over a year for her child to be seen by a paediatric ear, nose and throat consultant for a proper diagnosis and more than another year before an operation took place. In all, it was nearly three years before the infant (now six) was properly treated. The operation didn’t work as well as it might, (had she been treated sooner) and her hearing loss may not have been so serious.

In the week that the building of the National Children’s Hospital has been put off due to an overturned planning decision, this mother had every right to complain about the lack of affordable treatment and hospital services for her child and the children of Ireland.

But it also raises another issue: the cost of access to treatment and the choices we make in a society that is chronically unable to prioritise our collective and individual spending on health care.

This family, despite having earned could not afford health care for their four children despite the great need for prompt treatment: three of the children have medical conditions, she said.

 The total cost, is, of course more than just the annual insurance premiums: there are also GP bills and other outpatient treatments that may not be even part-covered by a plan, plus up to €132 a month worth of medication outside the Drug Treatment Payment Scheme.

But with another €700 million plus being stripped out of the public health care budget in 2012 (and probably next year too), private health insurance (PHI) costs rising at double digit rates, and over 60,000 people dropping their insurance and reverting to the national service in 2011, families who are not on medical cards need to re-examine how they can meet healthcare costs that are only going to go one way - up.

March 1 is a crucial deadline day for any family with VHI cover. It is the last day that the VHI’s One Plus ‘kids go free’ offer is available for existing customers to switch to or for new customers to join as the state insurer raises its rates tomorrow by between 6%-12.5%. Quinn Healthcare is also raising its 2012 prices tomorrow (Aviva did so this month) and all three are withdrawing their special value, ‘kids go free’ offers by mid-March.

The clock is ticking, but switching to these offers within the deadline, says the specialist health insurance advisor Dermot Goode of www.healthinsurancesavings.ie can save as much as €1,800 a year for a typical family. 

If you have no choice, and simply cannot afford the €1700  or €1800 the reduced plans will still cost – and families where redundancy has struck one parent or where the cost of living has made everyday bills like the rent or mortgage, the utility bill and car insurance impossible to pay on time – the inclination may be to heavily cut back or abandon the insurance altogether.

As one reader – one of the 66,000 who has stopped paying for health insurance put it recently, “we’re going to have to take our chances with public health and hope no one gets too sick this year.”

It’s a tough decision, especially if you have already had an experience in the past of regular visits to GPs, consultants and in-patient facilities with a child who suffered from tonsillitis or glue-ear or a host of other not too dangerous conditions that can affect certain families, but which was able to be treated pretty quickly because you had health insurance.

Now, when so many families can no longer even ensure that both the adults are covered, their remaining options are to try and drop down to the lowest value (and benefit) plans either for themselves and the children and hope they will have sufficient money to meet the ‘excess’ payments; or give up private healthcare altogether.

Dermot Goode says there may be another way. It wasn’t too long ago that the insurers allowed children to be insured separately, “but no longer. They require an adult member before children can be covered”.

One way for a family to keep their children covered, he says  “could be for a grandparent or other willing adult – an aunt or uncle, say, who already has insurance, to add the child or children onto their membership and then collect the premiums from the child’s parent.”

According to Goode, entry level plans that are suitable for the vast majority of healthy children are as inexpensive as €207 a year and is far more affordable for two or even three children than even the cheapest family plans that require full cost cover for two parents.  It is also a way to afford the peace of mind needed if parents are worried about the long waiting lists associated with so many treatments that are considered ‘elective’ by the public health service but which can debilitate a small child if delayed.

 “This ‘solution’ is just the reverse of something I’ve seen many times, where better off adult children paid for a parent or other elderly relative’s insurance cover which they couldn’t afford themselves,” says Goode.

It’s actually just another example of how, in hard times, families can build a personal financial Ark together, and do their best to make that nobody gets left behind.


3 comment(s)

Question of Money - February 26, 2012

Posted by Jill Kerby on February 26 2012 @ 09:00

How to reach the heights with your summit funds

MD writes from Dublin: I have two EBS Summit Funds, one is Mutual, the other is Investment. Both funds are in Growth. What is a Mutual fund? What is difference between Mutual and Investment funds? Q3: Which is the best to be in?


A ‘mutual’ fund is another description of a pooled, unitised investment fund that people with a regular amount of money or a lump sum can purchase that is then managed on your collective behalf by professional fund managers.  In your case, Irish Life Investment Managers (ILIM) manages the Summit Funds on behalf of the EBS. 

There are four EBS Summit funds - Summit Balanced, Global Leaders, Growth and Technology, each one targeting a different group of sectors, assets and geographical areas. They also represent different degrees of risk. You need to double check in which fund or funds your money is invested, but the Summit Growth Fund includes a wide range of global consumer goods and services, mostly located in Europe and the USA. 

I suggest you speak to an independent, fee-based financial advisor about your holding.  Better-late-than-never this person can properly explain to you exactly what it is that you have bought, how much the investment is now worth and whether the fund (s) are suitable for your needs. If it isn’t, the advisor will be able to present you with other options.


NJ writes from Dublin: Last year I purchased shares in a French company listed on the Paris stock exchange. On receipt of my dividend from the Irish broker I discovered that both French tax of 27% and Irish tax of 20% had been deducted. Can I apply for an exemption for either of these deductions?

On your annual Form 11 income tax return you will be asked to record the gross dividend you were paid by this company, the French withholding tax and the Irish "Encashment’ tax, says Barry O’Donnell, a director of Foreign Tax Returns Ltd, a Dublin tax services company.

“There is a complex formula used in order to work out whether a further credit is due in Ireland in respect of the French withholding tax already suffered on the dividend,” says O’Donnell. “But you will be able to claim a full credit against your tax liability for the Irish encashment tax paid by your broker on the receipt of the dividend. If you have no tax liability you will be given a full refund of the encashment tax.”

A tax advisor can help you correctly claim a refund.


JC writes from Dublin: I have a cash offer of €160,000 on my house, my principal private residence. I owe Bank of Scotland €113,000 on a tracker mortgage with a 21 year remaining term. The interest rate is 0.6% above the ECB rate, or 1.6%.

I am wondering if the bank will settle for less than I owe them to clear this mortgage, which I believe is unprofitable for them. If you believe they will, what should I offer them? I didn’t talk figures but they have asked for my offer in writing. I realise it has to be an attractive offer to them as well as for me.


The banks that have a particularly heavy exposure to tracker mortgages – like Bank of Scotland Ireland, the PTSB and Bank of Ireland, are certainly keen to get these loss-making mortgages off their books and to put their customers onto better value (for the bank) standard variable rate ones for the duration of the loan terms.

If you were offering to trade in your tracker in exchange for an standard variable rate (SVR) mortgage, you might be able to convince them to give you a very competitive interest rate or maybe even write-off part of your outstanding balance, but Karl Deeter of Irish Mortgage Brokers in Dublin is not very optimistic the bank will do so once they find out that you already have a buyer for your property.

“If your reader had a bank account full of cash ready to clear the loan, that might be one thing. But if they find out there is a buyer, which they will because you can’t show them the cash upfront, then they will likely refuse. The bank will probably be of the view that they don't really need to give a discount to someone who is going to sell anyway.”

“Still,” says Deeter, “there’s nothing to lose from trying.”  Good luck.  


SC writes from Galway: I have a question about fire brigade charges for domestic homes: is there a specific levy on insurance policies of 1.5% for fire charges, which is not being passed onto local authorities?  Also, imagine my shock upon checking my home policy and finding out that I'm only covered for €1,500 (buildings and/or contents). This is totally inadequate cover for any standard sized domestic home. If I had a domestic fire incident, then two fire brigades would be likely to attend that's €460 x i2 = €980 and God forbid the incident wasn't dealt with within 60 minutes, the bill would rocket to €1,840! Surely it is in the insurance company’s interest to have realistic fire brigade cover considering their action and professionalism would minimise the size of the insurance claim.


It is not correct, says Sean O’Connell of the Insurance Shop in Fairview, despite such a claim last year by Dublin’s Lord Mayor, that insurers designate a 1.5% of the buildings insurance value to the cost of fire brigade call-outs. Some home insurance policies simply state that they will cover the cost of valid claims for call-outs, “without specifically stating the amount or a ceiling, while others will indicate the amount they cover.” he says.  Royal Sun Alliance, for example, fall into the former category, says O’Connell, and Zurich Insurance, the latter with a €1,500 payment limit.

“The best thing to do is to always check the contract carefully,” for exactly the reason you state: a large fire with multiple fire tenders could leave you with a very large bill and a much higher renewal premium the next year.



292 comment(s)

Sunday MoneyComment, February 26, 2012

Posted by Jill Kerby on February 26 2012 @ 03:04

Sunday MoneyComment, February 26, 2012



The averaged annual consumer inflation rate of 2.2% (to the end of January) is about as accurate as the ‘average’ per capital consumer savings rate, reckoned to be about 11% of the ‘average’ income.

I doubt if the ‘average’ man or woman on the street recognises either as a reflection of their spending costs or saving capacity. Everyone knows that only older, mortgage-free people have any savings, while newspapers persist in constantly mixing up the annual rate in inflation with the monthly one and inevitably it gets reported that our inflation is quite benign, when it is anything but.

I would agree that in my household, home energy costs, according to the CSO’s latest figures, are up +9.8%; bus/transport fares by +2.8%, utilities and local charges by +8.9%. Health care inflation, for some reason, is not included, but I know that our family health insurance plan is up +15% over the past year. Meanwhile, school fees and books are up +8.9%, petrol (by my own estimation) is up about +30% and the cost of groceries, which still includes meat, eggs, dairy and bread is up a lot more than the official annual rate of just +0.3%.

Has no one in the CSO noticed how the price of meat and cereals has been shadowing the rising price of oil?

(I don’t have a mortgage anymore, but anyone with a variable rate one has been crucified in the past year by that official annual ‘inflation’ statistic of +7.8%.)

Meanwhile, the stuff we buy only occasionally, like clothing and footwear is down -1.1% over the year; furniture by -2.5%, and dining out by -0.8%.  The CSO determines the inflation rate by the weighting of each category, but that +2.2% does not reflect the rising cost of living in my household or those of my family and friends.

What the CSO never adds to its consumer price basket, of course, is the inflationary impact of government to our household costs.

How about the 2% extra VAT; the 7% USC, the 1.6% annual pension levy, the 2% Quinn general insurance bailout levy, the €100 household charge and the extra €100 charge I just paid to have the same refuse company keep collecting our rubbish?  That +2.2% overall inflation rate for the past 12 months is looking increasingly ludicrous.

Oh, and as for the CSO substituting fruit smoothies to their revised new inflation basket instead of champagne, who are they kidding?

Champagne was always a special indulgence for the ‘average’ household. And I cut out those precious, (at €2.40 each!) little bottles of pulped fruit long ago.

If anyone gets a smoothie around here it’s made in the blender from bananas and plain yoghurt with a few strawberries or whatever other fruit is going a little mushy in the fridge and orange juice. Occasionally I will buy a litre size carton when the ‘Innocent’ company periodically puts them on sale.

Yes, the bought ones are delicious and convenient.  So is eating out. But we don’t do as much of that anymore either.


Time running out for discount family health insurance

Next Thursday, March 1 is the deadline to cancel and renew or switch out of expensive VHI health insurance plans before the price goes up between 6% and 12%.

“In a few weeks we could see the cost of health insurance effectively double for many families, with VHI families seeing a rise of €1871; Quinn by €1,840 and Aviva by €1,624,” says specialist health insurance advisor, Dermot Goode of www.healthinsurancesavings.ie

By mid March, families that want to avail of the kids-go-free offers by all three insurers will find that they have been withdrawn.

Goode says the above amounts can be saved by a combination of acting before the premium increases, availing of some of the special adult rates still available and availing of the free cover offers for children across all three insurers.

For example, Aviva’s Level 2 Hospital will cost €3,128 for a family of 2 adults and 2 children (€1291.30 & €272.70 respectively).  By opting for the Level 2 Health Excess for the adults (€752.00) and the Family Value for children (free now but normally €217.00 per child), they can reduce the cost of their family cover to €1,504 (savings of €1,624). 

At Quinn, Essential Plus (with no excess) will cost €3,490 for a family of 2 adults and 2 children (€1390 & €355.23 respectively).  By opting for the Healthwise Plus No Excess plan for the adults (€825.00 each) and the Essential Select for children (free now but normally €230 per child), they can reduce the cost of their family cover to €1,650 (savings of €1,840).

Finally at VHI, Health Plus Extra (the old B Options) will cost €3,557 for a family of 2 adults and 2 children (€1461 & €317.67 respectively).  By opting for the One Plus Plan for all the family, they can reduce their cost to €842.90 each for the adults whilst the children will go free on this plan.  This reduces their costs to €1,686 or an overall saving of €1,871.  The normal price of this plan for children is €218.50.

Trying to compare costs and plans yourself, or using the HIA.ie is a nightmare. If you can (just about) still afford private health insurance the do yourself and your family a favour and pay a fee to a specialist broker who can ensure you buy an affordable, appropriate plan.


Pension prudence be damned?

As of this month, struggling pension fund trustees can opt to hand over the money they would have had to find to an annuity income for their workers to the Irish government which will then provide a sovereign annuity bond that will pay an enhanced income rather than the paltry one the trustees might have had to pay over instead.

Irish sovereign annuities for pension schemes purposes came into force at the beginning of this month, signed into law by the pensions minister Joan Burton.

And while the pensions industry had been keen a couple of years ago when Ireland’s sovereign bonds were triple A rates to shift some of the annuity provision to the government, not everyone is still quite so keen.

What would happen, they ask if…gulp, Ireland ever defaulted on their bonds?

Pension funds are supposed to invest in safe, sustainable investments so that members can be sure their money won’t be frittered away by bad investment decisions.

It’s the reason why so many global pension fund managers have had to sell their stakes in newly rated junk bond and near junk bond grade corporate and sovereign debt bonds in Europe. They’re just not safe enough anymore for retirement purposes.

Domestic investment by Irish pension funds, especially in expensive infrastructure projects, has been raised many times by government but were nearly always dismissed by fund trustees, whose primary duty of care is to the retirement needs of their members, especially not to the cash needs of a government already in receivership.

Some pension consultants and advisors, like Goldcore Wealth Management’s Marc Westlake don’t think it’s a very good idea at all last month remindedthe IBA and the Minister for Finance that “it was excessive investment in Irish property” in particular and in the banks that backed those investments that contributed to Ireland’s downturn and the poor performance of many Irish pensions funds.

 “The risk here is that the IBA is seeking to preserve tax relief on [the €80 billion value]pension funds by offering to “promise”, or worse, surrender some of our existing private pension provision (the key is in the word private) to be invested in Ireland by the state,” says Westlake. “For someone who believes in free market economics, the thought of handing over my life savings to the state to invest makes me more than a little anxious.”

The majority of the people with private pension funds, he says, are already fully invested in the Irish economy through their ‘human capital’ while at the same time their employment, home and business interests and tax liabilities are also located here.

“From a prudent investment perspective everyone should diversify their portfolios internationally and should be free to invest their financial capital globally. Secondly, those investors who wish to patriotically support Ireland and wear the green jersey should be free to invest in Ireland – but nobody should be compelled to do so.”

Westlake is right of course, but the prize – for the state - is significant. Even 10% of that €80 billion would be far greater than the money raised and kept from the sale of public assets.

The Minister has already raided hundreds of millions of euro of private pension savings through the annual 1.6% pension levy. He might just say “prudence be damned” this time.

If you don’t agree, you might want to let your pension trustee know before it’s too late.


1 comment(s)

MoneyTimes, February 22, 2012

Posted by Jill Kerby on February 22 2012 @ 09:00



Talk is cheap.

And never more so than during our endless discussions about the moribund residential property market.

You’d like to think that some consensus could be reached, not just about what is causing the endless downward price spiral, but what can be done about arrears and negative equity; the difficulty that potential buyers are having in securing loans; and perhaps most contentiously of all, how a property tax can be fairly and equitably applied from next year. (Not a chance.)

Last Friday, Central Bank data on mortgage arrears (to the end of December 2011) showed a huge jump to 9.2% of all mortgages on last September’s figures (8.1%).

Of the 768,917 known mortgages worth €113.5 billion, 70,911 of them were officially in 90 days arrears to the end of last year, compared to 62,970 at the end of September 2011.

A total of 74,379 mortgages had been restructured to December 31st, that is, the mortgage holders are now only paying interest, have had their repayment terms extended, or have been granted a short term mortgage payment holiday. This figure is up 6.7% on the 69,745 restructurings up to last September.

If 90 day arrears continue at this pace (assuming mortgage numbers stay the same) there will be 100,833 of them by the end of this year, or just over 13% of all mortgages. Restructurings will rise to 96,406. Combine the two and nearly 200,000 mortgages, or nearly 26% of all mortgages will either in arrears of 90 days and/or restructured.

(In the USA, the last available figures from the NY Federal Reserve Bank to September 2011 shows that just over 7% of all mortgages were in 90 day default.)

So what can be done about arrears?

Very little, except to join the queue at your bank and come under the highly intrusive Central Bank-agreed Mortgage Arrears Resolution Process (MARP) in which you will either be offered forbearance measures until you can resume paying your full mortgage every month, or find yourself at the end of one of the 9,300 final bank demands that lenders have issued so far with 3000 cases so far ending up in legal proceedings. (Only 187 court  proceedings  were  concluded  during the past quarter and only 109 orders granted for possession or sale.)

It is likely to be at least a year before the new insolvency and bankruptcy legislation comes on stream that will hopefully bring real closure.

However, at last weeks public hearing into the draft Bill, the Irish Bankers Federation insisted that their members are abiding by the new codes of conduct, and doing everything possible to restructure mortgages and avoid repossession.

The Free Legal Aid Centre, MABS and New Beginning, the consumer advocacy groups disagree.  For them, this bill, as proposed, will result in a risk of higher than necessary bankruptcies, and unnecessarily long period before the insolvency/bankruptcy is discharged that may not save the family home after all.

Meanwhile, if you have difficulty in dealing with your mortgage lender, the IBF says that you should go to the Financial Ombudsman;  FLAC, MABS and New Beginning advocates say you should come to them AND the Ombudsman.

Finally, the government think that more tax relief and tinkering by NAMA will help the property market.

It has slightly increased (to 30%) and extended (to 2017) mortgage interest relief for first time buyers in 2012 and to those who bought between 2004 and 2008. It is permiting NAMA (in a pilot project) to flog off 150 of its inventory of mainly residential apartments.

Can this help resurrect the market?  Unlikely.

What has to happen first is for prices to stop contracting, perhaps to the 70%-80% fall from peak prices that academics show is typical of great property/banking collapses. Furthermore, the huge inventory of unsold and empty properties will have to largely cleared (or bulldozed) and employment growth and bank lending will have to be restored.

So what can be done for someone in negative equity who wants to take up a new job or trade up but can’t sell their home?  The government thinks a negative equity loan may be a ‘solution’, even if there isn’t much support for the idea given how Bank of Ireland and PTSB, the two banks mentioned, are likely to want applicants with valuable tracker loans to surrender them.

Anyway, how can it be alright for anyone to be encouraged to take on a 125% mortgage (in this market) when it is now accepted that 100% mortgages were a very bad idea during the boom?

Perhaps this is where the government think NAMA comes in, with its offer to absorb 20% of any future negative equity on residential properties they sell.

Even if the market does bottom out after another 20% fall in prices, NAMA apartments will be very difficult to fund (unless NAMA also provides the finance) and this being Ireland, will still be harder to sell in the future than houses. Finally, this NAMA deal undermines every ordinary sellers who can’t cover future shortfalls.

There is no credible government intervention that will resurrect the Irish property market.  It will rise again when the wider economy does.

Anyone dead set on buying a new home or trading in an old one in 2012 needs to have four things on their side: an exemplary credit record; low to nil other debt; a strong income; a substantial (perhaps as high as 20%) down payment and the ability to keep repaying your loan if interest rates rise (and they will.)

If you can’t meet those criteria, keep renting.



0 comment(s)

Sunday MoneyComment - February 19, 2012

Posted by Jill Kerby on February 19 2012 @ 09:00


100% mortgage loans were bad enough. How could a 125% one now be a good idea?


Politicians can’t help themselves from further meddling and tinkering with problems of their own making, such as our disastrous residential property market, especially when they have the help of the bankers who are supposed to be running most of the banks on their (and our) behalf.  

But their latest property wheeze, allegedly to "kick-start" the moribund market this Spring and which involves Bank of Ireland and PTSB lending negative equity mortgages, is pretty dumb even by their standards.

For example, if a buyer fulfils the qualification for such a loan (that is, they cannot add more than 25% worth of existing negative equity to a new loan) they'll still have to jump through all sorts of other rigid income and loan-to-value hoops, plus risk having to give up a valuable tracker mortgage for a standard variable or maybe, fixed rate one.

A negative equity loan may solve a short term problem, like needing to take up a new job in a new city or needing more space for a growing family, but how can it possibly be okay to sanction the lending of a 125% mortgage (in this still falling market) when everyone now agrees that 100% loans during the boom were a disaster?

And what if Professor Morgan Kelly, the high priest of the property doom ’n gloomers was correct all along and Irish prices fall by as much as 80% of the bubble peak or 20-25% more than they’ve already receded? The homeowner could end up with 145% of negative equity (just like tens of thousands of others with far greater than a mere 25% worth right now). 

It’s no bed of roses being an amateur landlord these days, but renting out the family home and then becoming a tenant in a more suitable one is surely a better, more flexible option than adding to an already serious underwater loan problem.


Pension good sense from Deputy Mitchell O’Connor

I have never met Deputy Mary Mitchell O’Connor, but she’s had my sympathy after being mocked for inadvertently driving her car down the front steps of the Dail car-park last March.  I do things like that too.

However, her recent suggestion that workers with pension savings should have a chance to unlock some of their money before pension age is a sensible one, and would have broad support by many workers and especially the self-employed and small business owners.

With the banks not lending, and frankly those who might qualify for a loan reluctant to pay the kind of interest and collateral conditions on offer, having access to money in their pension fund is possibly the only affordable capital that so many hard working business people and workers feel they could draw down.

The existing pension regulations, which have never allowed any drawdown of personal pension pots, except in cases of early retirement due to illness or redundancy close to retirement age smack of yet more nanny-statism, especially in the case of the self-employed and company owners.

There’s no question that most or all of the tax relief that would have applied as the contributions were made would have to be clawed back, but this is common practice in many countries, like Canada and the US where pension fund holders do have access to a certain amount of their personal pensions funds.

Deputy Mitchell O’Connor suggested that perhaps only the equivalent tax-free lump sum be available to drawn down (with or without the tax-free part) or that workers with AVCs, additional voluntary contribution funds that help top-up service shortfalls could be targetted for the draw-down.

She believes allowing pension funds to be partially encashed would help give a boost to the domestic economic; I think it might save some small businesses from going under as some of it gets paid to creditors, like the Revenue or even the credit unions who are also now regretting making plenty of small business loans that have gone bad.

The problem with the state letting the prudent and responsible owners of these funds from having early access to the money of course is that it might catch on… and there will less for the government to tax, levy or confiscate.

While she’s at it, maybe she’ll consider the scary news out of the UK that the Chief Secretary of the Treasury Danny Alexander (a LibDem, oddly enough) wants top rate pension tax relief to be abolished.

What happens to pensions in Britain tends to happen here eventually.

This idea of getting rid of higher rate tax relief on contributions was first mooted by Fianna Fail, who claimed the state needed this money more than the poor working sods who didn’t want to end up relying on the state (or their families) in their old age and were willing to forgo income now.

The LibDems not only want to raise more tax, but they also want to punish anyone who can afford a pension because they pay top rate tax. If some workers only pay 20% income tax, and can only contribute that much income tax free to a pension, then everyone should be thus restricted, goes their argument.

Fortunately, the UK Chancellor George Osborne realises that if you remove top rate income tax and make pension savings too expensive (who would willingly pay 61% tax in total on a pension income?) all that happens ins that more people, who do already will end up relying on the universal (and unsustainable) state old age pension system.

Perhaps Ms Mitchell O’Connor, who must surely recognise a pyramid scheme when she sees one, might champion not just the people who are desperate to take some of their own money out of their pension funds, but those who desperately want to keep funding them?


George ‘Nespresso’ Clooney is a class act


Like millions of people, I shop online, mostly for books and mostly, alas, from Amazon.co.uk where the price is keen and their delivery service is fast or Kindle-instant. 

Since I’m trying to stay away from the temptation of the high street where I keep buying stuff I don’t need – books excepted - my favourite Dublin bookshop, Hodges Figgis, is now strictly reserved for occasional Sunday afternoon browsing.

What I cannot live without, however, is coffee.

The office coffeemaker is a Nespresso and like its patron, George Clooney, it is perfect, producing rich, dark espressos and lovely, silky smooth ‘lungos’.

Every single time.

The only bad thing about the Nespresso (and I don’t think 37 cent for a great coffee is excessive) is that the only place in Dublin where you can buy the pod thingies is Brown Thomas.

Aside from being on Grafton Street, a strada non grata, the third floor Nespresso shop also boasts the only queues in the entire store.

I know that Brown Thomas’ management insist that the store is making lots of money, but not on the days when I am standing in the Nespresso queue and every other department seems utterly devoid of any passing trade.

Out of coffee and unable to get to BTs last Thursday, a sympathetic friend asked me why I hadn’t ordered my Nespresso thingies on-line.

“You will never have to join the BT coffee queue again.”

I ordered 200 coffee pods at 9.30pm and at 8.30 on Monday morning, they arrived by courier.

How’s that for service?  (George Clooney is a class act.)




1 comment(s)

Question of Money - February 12, 2012

Posted by Jill Kerby on February 12 2012 @ 21:24

Safe but sorry returns from German State bonds 


MM writes from Dublin: Could I ask you about German government bonds? Specifically the minimum purchase amount, investment periods, are they fixed rate, what are the Irish/German tax considerations, where in Ireland can I buy these bond, and finally your views on them as a safe investment?

German government bonds, just like those of other countries and the corporate variety, are sold as a form of IOU to institutional and private lenders.  In return, they receive an annual ‘coupon’ or rate of interest and the return of their capital investment at an end of an agreed term. Also known as gilts, or fixed income securities, government bonds are sold by stock-brokers who place your order on the bond market, based on the term of the bond and the amount you wish to spend. 

You can deal directly with a stockbrokers or use the services of a fee-based authorised advisor, who can also explain the somewhat complicated pricing method used for bonds, the yields they pay, and any tax liability you may have on both the yield and the sale or trade of the bonds, says independent financial advisor Vincent Digby of Impartial.ie  “Minimum purchases from a stockbroker can sometimes be as high as €10,000 - €25,000,” says Digby.

Since Germany is regarded as the strongest economy in the EU, and is far more creditworthy and likely to repay their ‘sovereign’ bondholders than say, Greece, Portugal, or even us, German bond prices are comparatively high at the moment, he says, and the yield is very low. This could change in the future, which is why some people trade in and out of different bonds to try and improve the income that they generate.

Your money may be safer in a German government bond than a Greek one, but all medium to long term bonds can be susceptible to the effects of inflation that can eat away at the spending power of both the fixed annual rate of return and the long term value of your capital.

The excellent motleyfool.co.uk financial website has an archive of educational articles about bonds. This one is a good place to start: http://www.fool.co.uk/news/investing/2010/09/27/a-brief-history-of-bonds.aspx?source=isesitlnk0000001&mrr=0.25

SS writes from Dublin:  We are British citizens living in Ireland since July 2010 after taking early retirement ages 59 and 55. Our only income is our occupational British pensions.  We now pay Irish income tax, PRSI, etc., because our occupational pensions are classed as income and we are not classed as pensioners until we reach the age of 66. We have no income generated in Ireland and do not claim any benefits.

We will both qualify for full British state pensions at ages 65 and 66 as we both had a full working life but they are worth about half the Irish state pension!

We recently read that under EU rules we might be able to receive an Irish state pension based on our Irish contributions since moving here and British national insurance contributions combined - is this correct? 

As we now live permanently in Ireland and have paid all the contributions required we feel that we should at least be paid the pension rate for the country we reside in.

Under bi-lateral social security agreements (European Regulation EC No 883/2004) your Irish and UK social security contributions can be combined and possibly result in you and your spouse each qualifying for an Irish contributory old age pension from age 66.

The application forms you will be asked to fill out for the Irish state pension includes a section that asks if you have ever been employed in an EU country other than Ireland and ask you to provide the relevant details. If you have paid sufficient social insurance contributions here, the Department of Social Protection with then calculate if and how much of an Irish or combined Irish and UK pension you will receive. 

The formula they use, and a case study can be found here on the excellent Citizen’s Information website: http://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/claiming_a_social_welfare_payment/social_insurance_contributions_from_abroad.html#l7320b or you can visit your local Citizen’s Information Centre.


NM writes from Dublin: My son, who lives in England owns 14,000 shares. He wants to sell these shares in order to purchase a family home in England. Four years ago, I organised the sale of some of his shares through AIB with absolutely no difficulty, since last year new regulations have been brought in and it is proving much more difficult. I have been told that he will have to set up a bank account here that will take time and effort. Is there any quick way of getting over this problem?

I spoke to NCB Stockbrokers who told me that share dealing regulations have tightened up in recent years and that they cannot sell your son’s shares on your instruction. He would need to have an account with them, and to do this he would be required to satisfy identification and anti-money laundering terms and conditions.

Because your son lives outside the state, NCB would also require that he furnish them with a letter of introduction from their own bank in the UK.

If your son wished to sell the shares himself, he could open his own on-line, execution only brokerage account. He should check out sites like TDWaterhouse.com.  He just needs to make sure he has all the necessary documentation, such as the share certificate, to prove that he is the actually owner of these shares.



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The Agony and Ecstasy of Securing a Good Pension

Posted by Jill Kerby on February 12 2012 @ 09:00


The Agony and Ecstasy of Securing a Good Pension


From March 1st nearly 8000 public and civil servants who are taking the enhanced early retirement package will be able to start enjoying their retirement with an income that will be worth 50% of their final salary, proportionate with their years of service.

Their biggest decision will be what to do with the tax free lump sum part of their package. This is a ‘good’ worry, of course, and if they take proper, impartial advice and make themselves familiar with the technicalities of any account or investment fund they buy, their lump sum should be safe and a source of enjoyment.

The retirement endgame for someone in the private sector with a defined contribution pension – the kind that is based on the amount of money contributed into the pension fund over the years and the investment growth achieved - can be fraught with difficulties, notwithstanding their tax-free lump sum.  Their choices are:


  • To cash in their fund, but pay top rate tax on the proceeds. For example, if their fund is worth, €150,000 (after taking the tax-free lump sum) and they pay 41% income tax, they will be left with €88,500.
  • To buy a retirement annuity pension income for life with the €150,000 and assuming a 5 year guarantee payment and a spouse’s two/thirds survivor pension, will receive an annual income of c€6,800 per annum.
  • Or, they may be able to transfer their pension fund into an Approved Retirement or Approved Minimum Retirement Fund, (ARF/AMRF) from which they do not have to commit themselves to an income for life, but can draw down annual income (ARF only) or interest from the assets in the fund (AMRF). The attraction of this option is that any money left in the fund when you die does not revert back to the life assurance company as happens with annuity pensions. In other words, your estate/heirs inherit the fund.


ARFs are not suitable for every worker with a private pension fund. They are restricted to people with at least €18,000 of guaranteed pension income (including state or foreign pensions) or have €119,800 to purchase an AMRF or annuity.  It is now more restricted to higher value pension holders who may want to keep working after their official retirement age, is happy to keep their money invested and/or doesn’t want to lock into a very low fixed annuity pension income.

The government also forces ARF (but not AMRF) owners to an “imputed distribution”, that is, to draw down 5% of the value of their fund every year on which they will pay income tax and USC.  Add annual charges, typically 1%, and any other fees and it is absolutely necessary that the correct mixt of investments is chosen by the ARF holder.

(The regulations surrounding A(M)RFs are long and complex so I have posted the reference to them in the pension chapter in my TAB Guide to Money Pensions & Tax on my website www.jillkerby.ie )

Retirees with larger pension funds have favoured the ARF since they were introduced a decade ago, and many ‘self-administer’ them with an advisory firm. They are usually more aware of risks and rewards, “but nobody wants to lose their capital, not after building it up over a lifetime,” one advisor told me. “But finding returns that can produce a 6%-8% a year – to absorb costs, charges, tax, is not easy. Markets are volatile and fixed assets like cash or bond funds don’t pay those kind of returns and they are not immune from other shocks.”

All the major life assurers have ARF funds on offer and the risks vary. All good financial advisors are aware of them and can talk you through the pluses and minuses.

Most recently Canada Life has introduced a new ARF option – The Canada Life ARF with Lifelong Income Benefit, that is an interesting hybrid between an annuity pension for life and the ARF feature of a death benefit of the remaining value of the fund. It is available to people with funds between €25,000 and €1 million.

As with a traditional annuity, this ARF will produce a minimum guaranteed income for life by allowing a percentage of between 4% and 4.75% (depending on your age between 60-80) of the base fund value. This equivalent income is guaranteed, but could rise if there is better than expected growth from the investments that Canada Life will manage which they will lock-in for the client. Any fall in the fund performance is not passed on, but absorbed by Canada Life.

“The security of the fixed income for life, but still having access to the capital, especially after death, is a big attraction of this fund,” said the advisor, “but the capital can also be depleted if depending on the size of discretionary withdrawals.”  The other risk, he said, is if the government keeps increasing the amount they demand must be “distributed” each year. 

“If the government decides in the future that ARF holders must drawdown, say 6% or 7% or 10% of their ARF, instead of 5% right now [for which customer’s funds are adjusted at point of entry now since 4%-4.75% is the limit of the income guarantee] then the extra amount that the government might demand is drawn down will affect how long your capital will last unless the fund manager can make it up each year with up extra fund growth.”

A hybrid ARF like this one – which has been imported by Canada Life from their Canadian operation – tries to address the fears about irregular pension income and the security of the capital, but it isn’t perfect, say advisors.

They all admit that getting a decent, safe return from a pension fund - especially when the retiree might live another 20 or 30 years - has never been such a challenge and priority in such turbulent financial times.

Getting it right, the first time, has never been so important.


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Sunday MoneyComment - February 12, 2012

Posted by Jill Kerby on February 12 2012 @ 00:00


The best thing NAMA could do for the property market…is nothing


The government just can’t resist meddling in the property market.

Last week, three meddlesome events occurred:  first, the Finance Bill confirmed that extra tax relief would be available to first time buyers (FTBs) who purchased their homes between 2004-2008, regardless of whether they are in negative equity and actually need the relief and the extension of mortgage interest relief for buyers in 2012 only, until 2017, after which it will be abolished for all.

The next event was an announcement that a pilot scheme was underway to prevent the eviction of certain indebted homeowners by allowing for the voluntary repossession of their property, which they could then rent under a mortgage for rent scheme that involved a number of parties including private housing associations, local authorities, the Housing and Sustainable Communities Agency, New Beginning, the mortgage arrears lobby group and lenders.

Finally, NAMA, the world’s most expensive and secretive real estate agency, that is now whinging about the €200,000 salary cap that this bankrupt state has limited them to paying their staff (many of whom, ex-private sector estate agents that they were, would be otherwise unemployed) announced that they were ready to flog the first batch of its residential properties to the Irish public, complete with a promise that they’ll pick up the tab if the market value should fall up to another 20% in the future.

I don’t really have a problem with the limited number of indebted homeowners who might be able to stay in their homes under the mortgage to rent pilot scheme, a recommendation of the 2011 Keane report on the mortgage indebtedness crisis.

The participants will have to be people who would have qualified for public housing anyway; had limited incomes and will have to be deemed to have no chance of ever repaying their inflated mortgages. In other words, they should never been considered suitable candidates for a mortgage, in the first place.  By allowing the predatory, irresponsible lending practices of the banks, the state has a duty to correct an injustice, even if it does mean another part-write office of loans and another bill for the rest of us to pick up.

However, by at least handing over the deeds of the property and administration of the new tenancy to an experienced, privately run housing association, the wastage and inefficiency so often associated with government-run schemes might be avoided, and the local authority’s housing waiting list won’t get any longer.

The NAMA negative equity sales plan, on the other hand, is just another stupidity that has characterised every intervention into the property market by the state, including perpetual mortgage interest relief and an over-reliance on property stamp duty rather than some form of property tax.  Throw in the calamitous and corrupt relationship between the politicians, property developers and bankers during the bubble years and the loss of our sovereign independence should come as no surprise.

The EU still has to approve this ludicrous scheme. Let’s hope that it dawns on someone in Brussels that guaranteeing to make good up to 20% of any future loss on NAMA owned properties, only wilfully undermines the effort of every private property owner in the same building or street to achieve a fair, market price.

It’s certainly the concern of one such private owner who sent me an e-mail this week: 

How can NAMA get away with this? I am one of those owners whose been trying to sell their home, which I bought six years ago, for the past year. Everyone who walks in the door – and there haven’t been very many – keeps telling me my asking price is too high “because the market is still falling and we expect it to be worth 15%-20% less within a year.”

I’m lucky that I am only about €20,000 in negative equity, which I can finance myself, but if I cut the asking price any further, my bank won’t allow the sale to proceed.  I haven’t got a hope in hell of selling if NAMA starts guaranteeing a further 20% price loss.”

Frank Daly of NAMA told RTE’s Morning Ireland that the housing market needed “a kick-start”.

Yes it does, but not from NAMA. 

The ‘kick-start’ that will get the moribund Irish property market moving again will happen naturally when we pay off our debts, unemployment starts to reverse, the banks start lending again and properties are affordable again, relative to ordinary worker’s wages.

Until then, the best thing the government could do…is nothing at all.


Better no Insolvency/Bankruptcy bill than the wrong bill


Anyone interested in making a submission on the proposed draft of the Insolvency and Bankruptcy Bill might want to make sure they get to the first hearing of the Joint Oireachtas Committee for Justice, Defence and Equality next Wednesday afternoon.

The consumer advocate Brendan Burgess, the mortgage arrears lobby group New Beginning, MABS and others will be there to represent the interests of the people who don’t seem to be have been consulted very much in the drafting of this proposal:  the tens of thousands of indebted citizens and their creditors who need a workable and fair method to deal with this huge debt crisis.

The current proposal is a start, but it needs to be simplified and streamlined. The position of debtors needs to strengthened, ideally with amendments to compel the banks to engage and for the appointment of an Ombudsman.

Hopefully submissions will highlight how intrusive and punitive are some of the insolvency provisions and will question why the government is proposing to make the Irish laws so complicated – with four insolvency and bankruptcy options – when the British have two perfectly workable options in place with far more reasonable discharge periods than the one, three, five six and possibly eight years included in this draft.

I wish I was more hopeful about this terribly important new legislation.

But this draft needs so much work – and time is running out for so many people who need to close this horrible chapter in their lives – that if insufficient pressure is applied from the public, the ‘solution’ the Oireachtas ends up voting for could end up making things worse, not better.

Read the draft. Write, e-mail or call your TD or Senator and voice your opinion. Support your friends or family members who could end up in six or even eight more years of financial trusteeship if the draft is not rewritten.


The play’s the thing…until its backers run out of patience and money


This modern Greek tragedy has been unravelling for so long now that it isn’t just the money markets that have become a little bored and disinterested.

The Germans, the French, the Dutch … even we Irish, have seen the brinkmanship scenes played out so many times now that we’ve practically convinced ourselves that if the Greeks do leave the eurostage, it won’t really be the end of the world.

It just means we can all call it an early night, go home, let the director and writers tweak about with the script and expect to see the show go on.

Not everyone believes the Greek denouement will be so tidy.

Nor do they believe our tin-eared chorus of politicians when they keep repeating what the troika keeps saying about Ireland’s little performance so far: the political players may have learned the lines they’ve been given, but it doesn’t mean any of it is true.

We’re not really that far behind Greece – or its immediate understudy, Portugal.

We remain the most indebted country in Europe with a successful foreign owned export economy that doesn’t leave much of its profits behind and a failing domestic economy and people who still account for nearly 70% of GDP.

Until growth is restored at a faster percentage rate than the cost of servicing our debt we’re only digging ourselves into a deeper and deeper fiscal hole, even if it’s happening at a slower rate than in Greece and Portugal.

Fee-based authorised advisors I speak to regularly say that some of the same wealthy clients who were so keen to put their euro savings offshore last November and early December, when it appeared that Greece was on the verge of a default that might threaten our banks and the safety of their deposits, are now wondering if they were a little hasty. 

They see how the markets have surged in January on the news that Greece would get another bailout and how the ECB printed €500 billion to lend at 1% to German, French and other euro-banks that were most heavily exposed to Greek (and other) sovereign debt.

Their confidence in a soft landing may be premature, say the advisors, especially if the Greek people decline to accept the ruinous terms that their politicians have capitulated to on their behalf.

This fundamentally flawed play is running out of time and credibility. No one in their right mind would lend it a penny of their own money.


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MoneyTimes - Feb 8, 2012

Posted by Jill Kerby on February 09 2012 @ 09:00



With nearly 8000 civil and public servants opting to take up the latest enhanced early retirement offer from the government, a great many of them will be wondering what their options are regarding the ‘extras’ associated with their impending retirement, specifically, what to do with their tax free lump sum payments and their AVC accounts – Additional Voluntary Contributions – that they may have been contributing to make up for lost service years.

They should certainly expect offers of advice from their banks (which will see a large amount of money suddenly appear in their accounts) or any financial advisors or brokers that they may have dealt with in the past.

No matter how much your pension fund or lump sum is worth, or whether you are a public sector retiree, working for a private employer or for yourself, it is essential that you fully understand what options are available to your regarding your tax free lump sum, your AVC (if you have one) and what can and cannot be done with the bulk of the pension if you have a private sector defined contribution pension, the kind that is based on the amount of savings and investment performance.

For the civil and public servants leaving their jobs at the end of February, they will know by now the size of their enhanced retirement income, the size of their lump sum and how much they will get tax-free.

However, they should be careful about only getting advice on what to then do with the tax-free lump sum or the proceeds of their AVC (if it is not already part of their final pension calculation), from the mainly commission-paid brokers who often have the contract (sometimes exclusively) to sell general and life assurance products to public servants via their departments or unions.

The lump sum available is often a sizeable amount of money (upwards of €100k plus for higher earners). Any public or civil service worker who is getting one should carefully research for themselves what savings and investment choices there are (be warned, there are many) and/or seek the advice of experienced authorised advisors, preferably fee based ones.

Private sector workers who are members of similar defined benefit, final salary schemes to those in the public sector can also get a tax-free lump sum, a retirement income based on their final salary and years of service, and they may also have an AVC. They too have some important decisions to make.

Retiring private sector workers who have DC or defined contribution pensions, the value of which is solely based on contributions into it and fund growth, are also entitled to a tax-free lump sum; they may also have an AVC. But, along with PRSA holders (available to the self-employed and workers who are not members of occupational schemes) they have more options than defined benefit pension members on how the balance of their fund is used to produce a retirement income.

First, their company can provide or purchase an annuity pension for life for them, based on the value of their fund or they can do this themselves. Or they can take the cash in their fund (less their tax free portion) but they pay their highest rate of income tax on this sum. Depending on whether they meet various terms and conditions, they can transfer their fund value, less their tax-free lump sum, to an Approved Retirement Fund or an Approved Minimum Retirement Fund that can be left to continue to grow in value. This is an option people who have other resources, or have another income will take, until they are ready to fully retire.

Again subject to conditions– and the AMRF is much more restrictive – this pension fund option allows the holder to determine for themselves how much income or capital they draw down to suit their ongoing circumstances. (How ARFs work and the kinds of ARF that are available to pensioners is a story we’ll return to soon.)

ARFs are popular to those who qualify for them because pension annuities, based on bond prices, have been such poor value: a €150,000 pension fund might buy a 65 year old an annual income for life of just c€6,700 that is guaranteed for five years and provides a two-thirds pension for a spouse. Thank goodness so many retirees qualify for the state pension of nearly €12,000.

But to return to that hopefully - pleasant-  dilemma, that the public service 7000, and anyone else retiring this month are facing: what to do with the lump sum.Most advisors recommend that you first consider paying off your debts, especially credit card and other higher cost variable rate debt, followed by personal loans and, for peace of mind, mortgage debt.

It should be a taken that personal budgets and spending habits will be revised to take into account that you are now living on a fixed income but with fewer job-related expenses.

With the balance of your pension fund cash, you can now look for the most suitable and safest returns from savings accounts and/or investment options.  They need to suit your financial goals as well as your risk profile and take into account the overall value of your assets and wealth, such as property, cash, stocks and shares, art/jewellery.  A good advisor will also remind you to take into account issues outside your control, like future tax and austerity measures, price inflation and currency devaluation risk (as in, whether the euro will survive).

Retiring with confidence isn’t easy. It requires some effort on your part, a clear head to understand the complexities involved and good advice.

Most of all, don’t rush your final decisions.  You have the rest of your life to enjoy, or regret them.

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Question of Money - February 5, 2012

Posted by Jill Kerby on February 05 2012 @ 09:00

 Wifes pension payout depends on tax position


EO’D writes from Dublin: I will qualify for a contributory pension, but if my wife does not qualify for a contributory pension  -  she may not have enough contributions - can I claim her as a dependant? 

She has recently started part time childminding. To qualify for a contributory pension, what would she need to do, if she registered as a sole trader, and did annual returns would this qualify her? If the family she works for were to tax her, would they need to register as an employer, how would that work.

We want to be above board, but the money is small - approximately €200 per week - and we are wondering is the whole thing worth-while.

Without knowing the details of your wife’s social insurance contribution record or her age, it is impossible to tell if she will qualify for a contributory or part-contributory old age pension when she reaches retirement age. 

If she does not qualify, then you will be able to claim the Qualified Adult allowance for her which, for qualified transition/contributory pensioners is currently worth an additional €153.50 a week to the qualified adult on top of the pensioner’s own €230.30 payment. This €383.80 total weekly payment rises to €436.60 if the qualified adult dependent is over 66.

There are slightly different rules that pertain to the transition year pension at age 65 and the state contributory pension. To qualify in her own name for the latter, that is, if she reaches retirement age on or after 6 April 2012, your wife would need to become insured before age 56, have paid at least 520 full rate employment contributions or make up the balance with high rate voluntary contributions provided she has previously paid at least 260 full-rate employment contributions.

She must also have paid a yearly average of at least 48 paid or credited from 1979 to the end of the tax year before she reaches 66 or a yearly average of at least 10 full-rate or credited contributions from 1953 (or the time she started insurable employment if later to the end of the tax year when she turns 66. (This year average of 10 may qualify her for a minimum contributory pension.)

If your wife earns €200 every week, exclusively from a single family, it may not be appropriate for her to register as a sole trader. The Revenue can certainly advise her and her prospective employer about whether she is a direct employee or a self-employed service provider.

As an employee earning less than €352 gross a week, she would be exempt from PRSI but her employer would pay an 8.5% contribution. As a sole trader, earning up to €500 a week she will pay 4% PRSI contributions on all her income. In both cases she will have to pay the universal social charge but now that the earnings cut-off amount has increased to €10,036, she will only pay 4% USC on the €364 balance of her annual earnings or just €15.

Aside from your wife’s PRSI position, you should also check out how her earnings might affect your current tax position. Most couples are jointly assessed for tax and this could push you into a higher tax bracket, affect means tested social welfare benefits, or, on the plus side if your earnings are sufficiently high, even reduce your total tax liability by allowing you to enjoy the higher income tax band and rates that apply to married couples with both partners working.

Finally, opting out of the income tax system is not discretionary. If your wife takes this job, she has to pay her tax and other liabilities, as does her employer. The Department of Social Protection website provides downloads on PRSI at www.welfare.ie.  A good tax advisor or accountant can advise all of you about your tax and PRSI obligations, whichever way her new job is arranged.

BO’S writes from Dublin:  Every year I claim a refund for medical expenses from the revenue. Last year, in 2011 I received 20% back on my 2010 medical expenses. I submitted a medical expenses claims for last year, 2011 and to my astonishment Revenue said I have an under payment of €1,658 for 2011 and as such they will reduce my credits by €844 for 2013 and the same again for 2014.
I did nothing wrong and cannot see for the life of me how I could have an underpayment of this amount. Every year up until now I have always received money back for medical expenses etc. They are the one's that made this mistake and I cannot financially afford to pay them back this amount in two years as my wife is job sharing next year and money will be tight enough. Plus, I availed of the 'cycle to work scheme' last year for the full amount€1,000 and as such entitled to a tax credit for this.
Surely someone in the Revenue has made a big mistake.


Mistakes happen,  TAB Taxation Services advisor Sandra Gannon has suggested that if the claw back of the €1,658 in your 2011 tax bill is correct, it is because the Revenue have discovered some discrepancy in your income tax position and the tax band and credits you are entitled to. Your medical expenses claim is what prompted the wider review.

You need to get a full explanation for this underpayment notice and how many years for which it pertains. Your inspector of taxes at your local tax office or an independent tax advisor will be able to provide this.

If the €1,658 is correct, and it is to be repaid in two equal amounts of €844 in 2013 and 2014, you should also find out how it is repaid so you can budget accordingly. It is possible that €70 will it be deducted every month, directly from your salary for the two years.


MS writes from Dublin:  Is it necessary to claim a deduction for losses against a capital gain liability at the first opportunity or can a loss claim be carried forward to future years.

I have a capital gains tax bill to pay for 2011 and will also have one for 2012. I have a capital loss for 2011. Would it be best for me not to claim the 2011 loss for 2011 but leave it for 2012 when the CGT rate will be 30% as opposed to 25% for 2011.

Unfortunately you can’t choose when to pay the tax you owe on a gain.

If you made a gain from the sale or transfer of an asset between January and the end of November, you are obliged to pay your CGT (less your personal CGT allowance of €1,270) by December 15thof that year.  Any gain you earned in December has to be paid by the next January 31st.

The CGT rate for any gains you made between January and the 6thof December 2011 was 25%; after December 6th2011 the rate increased to 30%.

However, capital gain losses can only be offset against another CGT gain which occurs in the same year as the CGT loss, or they can be carried forward and used against any future capital gain.


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