Q&A

This week your questions on Irish Nationwide, deductible expenses and conscience money are answered

Irish Nationwide

As a share account holder with Irish Nationwide, I recently received notice of the building society's annual general meeting and duly posted my proxy vote.

You stated in reply to a reader's letter that the acid test of membership of a mutual is the right to vote at the a.g.m. Does this mean I will qualify for a windfall if Irish Nationwide demutualises, even though I only opened my account in December 2002?

L.J.B., Dublin

What it means is that you are a member of the building society but that is only the first step in eligibility for a windfall.

There is another rule which states that you must be a member for two years by the date the building society announces its formal intention to demutualise. That has not yet happened and will not take place until after the Oireachtas has passed new legislation that Irish Nationwide managing director Mr Michael Fingleton has been lobbying for intensively in recent years.

The key thing that will determine your eligibility for a windfall is the date on which the society announces that it is demutualising. In your case, that would have to be sometime in December 2004 or later.

It is impossible to determine exactly when the new legislation will be signed into law but the current timetable is for it to pass through the Oireachtas before the summer recess. I am somewhat sceptical that it will meet that deadline but, even with slippage, I am not sure it will be dragged out until December.

There's really nothing you can do at the moment except wait. At least, you have cleared the one hurdle that is within your control, opening an account with sufficient funds to be classed as a member in the first place.

Deductible expenses

I work as a solicitor in a Dublin law firm, but recently was disabled for three months due to an automobile accident. During my disability, while continuing to be paid, I travelled to London and enrolled in an intensive six-week course to prepare me for a barrister degree. The course cost £15,000, plus travel and lodgings. It will improve my CV when seeking job improvements.

Are these expenses, paid by myself, deductible from my gross solicitor's salary?

Some colleagues advise they would be deductible by my firm or if self-employed, but not by me since I am an employee. Is this correct and, if so, is this situation not unjust?

Ms C.H., Dublin

Your colleagues are correct when they say that your company could claim it as a training expense if it had chosen to send you to the course. Similarly, you could have claimed it as a necessary expense if you were self-employed.

Unfortunately, they are also correct when they say that as you are an employee paid through the PAYE system, there is no provision for you to claim back such an expense.

As to whether that's unjust, it would strike me that that is more in your court. You're the solicitor. There are lots of quirks in the tax system that appear unjust but I guess Revenue is wary of the abuse that would inevitably follow if people could claim all sorts of expenses for courses that may or may not be strictly relevant to their employment.

Indeed, in your own case, while this course may benefit your CV, it is questionable whether it would benefit your employer. Should you become a barrister, presumably, you will move into self-employment, leaving your company without a highly trained employee.

Conscience money

I wish to return conscience money anonymously. Some years ago, I received a large legacy and I invested it. One month later I withdrew half of my investment to give to a friend in financial difficulty. Halfway through my investment, I received details of its progress. However, they quoted me the full amount of my original investment. I rang them and told them of their mistake but they would not listen and said my original stake was still there.

My investment matures shortly and, anonymously, I wish to return the half of my original investment that I owe the firm. How can I send it without being traced? Could a bank draft be traced?

Ms M.L., Louth

I'm not sure I understand your insistence on anonymity. Going further, I'm not sure I agree with it. It could rebound on you later.

The problem seems clear. You invested this sum and, though you subsequently withdrew half of it, the financial institution has no record of this.

Commendably, you have no interest in receiving money that you are sure is not yours - even if, given your version of events with the institution, it is probably no more than it deserves.

First things first, even if the institution has no record of the money, do you not have some record yourself, in writing, from that time?

I'd certainly be careful about involving the friend whom you helped out as that might leave them open to liability to 'gift' or capital acquisition tax or possibly even investigation by the Department of Social and Family Affairs for welfare abuse.

If, indeed, there is no record, then you are in a bit of a quandary. The most important thing is to ensure that all your communications with the institution are in writing. You mention ringing them but it is more than likely that there will be no record either of this conversation - a bit like the original withdrawal.

The problem is that you got money from somewhere and, if the institution did not take it from your original investment, it probably erroneously took it from someone else's. Once that comes to light - and it's entirely likely that whoever has been short-changed will eventually be on to the institution looking for answers - the institution will come to you looking for its money back. There is legal precedent, at least in relation to the high street banks, that money paid in error can be reclaimed.

Now, if you give money back anonymously - even assuming you could do so - you could subsequently face a bill for repayment, leaving you paying the money back twice.

As to the mechanics of anonymous payment, the institution itself would be in a difficult position. It would presumably have to report money whose provenance it could not vouch for as it would have no right to retain it.

Given the tighter rules on money movements, I am not sure how you would do it apart from dumping cash in the letterbox - hardly a practical solution.

You are clearly disturbed by the prospect of receiving money to which you do not feel entitled. The best I can suggest is that you hold on to the money but do not spend it in case the institution comes looking for it. Make provision in your will for it to be passed on to a good cause.

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.