Q&A

No sign of pension after 27 years: I retired early from my job - or rather, I was offered statutory redundancy to leave because of incompatibility with management policy. There was supposed to be an offer of part-pension that never materialised. Through pride, I never went back to beg for same. I was in employment from 1956 to 1983, handled cash and made sales during the formative years of the company, and paid into the pension fund [ Irish Life].

I never did anything dishonest in my 27 years with the company and have a reference from the founder and original managing director. Do you think I have a moral or legal lien on some kind of offer at this stage of my life? I'm now touching 70 and living on the OAP allowance.

M.S., e-mail

As with most issues relating to contracts, the first thing to note is that any "moral lien" you might think you have on the company is not worth the paper it isn't written on.

If you were entitled to a pension, then it was one of the terms of the contract of employment when you worked for the company. Unless it was addressed and accounted for in your severance package, it may well still be there waiting for you. The conundrum in your case is that pension provision has changed remarkably since you parted company with this employer. Most importantly, the Pensions Act that shapes pensions provision these days was still nearly a decade away.

As such, you are talking about a time when occupational pensions were an altogether more haphazard affair. For instance, there was no automatic vesting period where you would automatically have rights to inclusion in an occupational pension where it was provided after a minimum period of service. Under the Pensions Act 1990, five years' service granted you access to an occupational scheme, a term that was reduced to two years in the 2002 Pensions (Amendment) Act.

You note that you paid into a pension over an extended period while you were with this company. In order to determine what benefit would be available to you as a result, you really will need to contact the company.

Essentially, if there is a preserved benefit due to you, the trustees of the pension fund should have been contacting you about it at the time of your 65th birthday in the absence of any other communication.

You clearly left this company on very bad terms but you do not say whether you have since moved. If you were entitled to a part-pension, it may be that the company, or rather the trustees, have been trying to contact you at what, for them, would be your last known address.

It is also possible that the financial settlement you received at the time you left the company took account of your pension fund as it stood at that time. As I say, the rules were very different then.

In any case, your only real course of action is to contact the pension fund trustees. Your former employer will be able to give you their names and contact details.

If, following this, you are still unsure or unsatisfied about your rights in pension terms, you can always contact the Pensions Board, which acts as a regulator for the Irish pensions industry.

Getting in touch with the company is not a matter of begging; it is simply a case of ascertaining what your rights are. In any case, you can't really go to the Pensions Board without first having approached your former employer and given them a chance to sort this out or explain to you why you have no entitlement to a pension despite your service and the fact that you paid into a fund.

Capital gains

In 1955, my father, on his retirement, purchased a house as the sole family home. He would not have paid more than £5,000.

In 1982, on his death, I inherited the house and moved into it as my sole family home. I shall soon have to move to a smaller house and am advised that it should be worth about €900,000 as a residence and perhaps twice that if purchased for development. What are the respective implications regarding capital gains tax?

Mr R.T., Wicklow

You will not have to worry about capital gains tax. The key element of the CGT tax code in these circumstances is that principal private residences (the family home) are exempt.

At the time of your father's death in 1982, the inheritance of the property would have been considered for tax purposes under the capital acquisitions tax (CAT) heading.

At that time, the Revenue will have assessed the market value of the house and made a decision as to whether you would be liable to tax on it.

There is a special threshold under CAT, more commonly known as inheritance or gift tax, for assets moving from a parent to a child and it is quite likely that, back in 1982, this property would not have taken you above this.

If that were the case, you would not have faced a CAT liability.

Thereafter, as you say, you have used it as a family home and the sale of the family home is exempt from capital gains tax. It is only second properties - investment or holiday homes - that attract a CGT liability.

The fact that the person who acquires the property may choose to use it as a residence or as a development opportunity is not an issue for you.

Whatever money you receive as a result of this sale will be yours to enjoy and use as you wish, without any intervention from the tax authorities.

Pensions split

I am in a company pension scheme to which the company pays in 6 per cent and I am obliged to pay 3 per cent. I also contribute another X per cent in AVCs. I can now access details of the pension online and have noticed that very often all my contributions are going into the scheme as "employee contributions" with the AVCs stated as zero - the overall monetary amount being correct. Will this have any consequences when I go to avail of the pension scheme benefits on retirement?

Mr N.R., Dublin

I think you should contact the trustees of your pension scheme as soon as possible. The worrying element is that there is no uniformity in how your additional voluntary contributions (AVCs) are being credited.

It seems that on some occasions, they are broken out from your normal contributions to your occupational scheme and on others they are lumped together. To my understanding, this should not happen. AVCs should be noted separately.

One of the key reasons for this is that you have much greater discretion in how you access the savings built up in your AVCs upon retirement.

While you will almost certainly be obliged to purchase an annuity with the proceeds of your occupational pension fund, this is not the case necessarily with AVCs - and that can have implications for both your own income and financial choices later in life and the resources available to your dependants once you die.

It may just be a technical glitch online but, if not, there could certainly be consequences for you when you look at your options in retirement.

Contact your scheme trustees and, if you receive no satisfactory explanation, I would suggest you contact the Pensions Board, which regulates the sector.

Deeds addition

Thank you for your reply to my query regarding the cost of having my fiancé's name added to the deeds of my apartment. I have now been asked by a friend would the costs be similar to have a partner's name added to the deeds.

Ms T.M., e-mail

The costs would be similar and, unlike your case, your friend would have little opportunity to avoid them.

As far as the Revenue is concerned, assets passing between people not related by blood or marriage are considered to be assets passing between strangers.

It doesn't matter whether the parties are engaged, long-term partners or simply friends or carers.

The fact that the people concerned could have long-term relationships is irrelevant as far as tax is concerned - in this case Capital Acquisitions Tax (better known as inheritance or gift tax).

This is becoming a growing issue in Ireland. The typical household of years gone by where people were either married or related by blood is, if not disappearing, at least less typical.

Increasingly, people are choosing to create family units without the necessity of marriage.

The disadvantageous tax position of same-sex couples living together is also attracting more attention.

As an engaged couple, you can choose to hold off adding your fiancé's name to the deeds until you marry and so avoid the adverse tax treatment. Your friend cannot.

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.