Q&A

Your financial questions answered.

Clarifying status of Barlo shares

I hold some shares in Barlo, which apparently has now gone private. I am unable to find the share certificates and have had no communication from them for a long time. What should I do?

Mr P.O'K., Dublin

Barlo, the radiator and plastics group that first listed in Dublin in the summer of 1988, has indeed gone private after a very mixed record as a publicly listed company.

The group was acquired for €84 million last April by Sarcon, a subsidiary of Fermanagh entrepreneur Seán Quinn's Quinn Group. He offered 48 cent a share for the company, trumping the 40 cent a share offered by a management buyout team led by the company's long-time chief executive, Dr Tony Mullins.

The move ended a saga that had been running for more than a year. Dr Mullins first got board permission to examine the possibility of an MBO back in March 2003. Four months later, he announced an indicative offer of 30 cent a share, well above the low-20s at which the stock was languishing at the time, but significantly below the 45-50 cent a share that analysts figured was fair value for the group.

The Sarcon offer was accepted with alacrity by shareholders - 88.2 per cent accepting by the first deadline.

Being above the 80 per cent level, Quinn Group was in a position to compulsorily acquire the remaining shares.

You should have received plenty of communication from the company and its registrars, Computershare, around this time, as the matter was subject to an extraordinary general meeting. I can only assume you might have moved since buying the shares without notifying the registrars of your new address.

Anyway, you now find yourself in the position of being listed on a "dissenters' register" - effectively a list of those people who have failed to surrender their shares for compulsory purchase.

Without your share certificates, you can do nothing. You must contact Computershare about getting the certificates re-issued - which will cost you - and then surrendering them for redemption under the terms of the offer.

CGT liabilities

I have been living abroad since mid-2004, but intend to return to Ireland within the next three to four years. I own one property in Ireland, which I purchased in 1998 and lived in for a number of years before my departure last year. That property is currently let to a tenant. I recently decided to put down a deposit on a slightly larger property and signed contracts during a trip to Ireland last month.

The new property will be completed in the coming months and I will have to sell my current property to pay the balance. However, I have been told that, as I will be living abroad at the time, I may be liable for capital gains tax (CGT) on the sale of my current property. Could I be liable for this tax on my private residence even though I am clearly not an investor? If so, how can I minimise the tax liability?

Mr J.C., e-mail

The simple answer is that you are certainly likely to be liable for capital gains tax, regardless of where you live. As you say, you do not have to pay capital gains tax as owner-occupier of a principal private residence. However, once you moved abroad and rented your home, you became an investor in the eyes of the Revenue, regardless of how you view yourself.

The tax authorities will charge capital gains on the sale, but it is likely to be fairly low if you are selling soon. Under capital gains rules, you are deemed to be the occupier for the last 12 months of ownership of your principal private residence, regardless of whether you were or not and whether the property was rented or not. As you only rented the property some time last year, you could be looking at paying CGT in relation to just a few months.

If you sell this year, you will have owned the property for around seven years. Let's say it was rented for 18 months before the sale. The last 12 of those would be discounted, so you would be looking at CGT on six months of seven years ownership, or just over 7 per cent of the overall capital gain.

Remember that you can use Revenue indexation on the original purchase cost up to the end of 2002, as well as deducting costs involved in the acquisition and disposal of the property, and avail of your €1,270 CGT allowance. That is unlikely to leave much for the taxman.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 10-16 D'Olier Street, Dublin 2 or by 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 questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.