With the refloating of PTSB, is this an opportunity to get some value from our old PTSB shares? I believe they are currently worth 6 cent approximately trading on a lesser market on the Irish Stock Exchange and will be replaced on flotation by 1 for every 100 held, valuing them then at €6 each.

My query is two parts :

Firstly, what were the free shares issued to depositors over the years worth at the time of issue? €0 or the quoted price at the time of issue.

Secondly, could these free shares be sold now and the loss realised (if their cost is based on their then market value) used to offset against profits realised on other share sales?

This is surely a point of interest to many small shareholders “stung” by the sudden banking share price collapse in 2008.

Mr R.D., email

Back in late 1994, just ahead of the flotation of the then Irish Permanent, the former building society’s 225,000 eligible members were offered 300 free shares. Six thousand former members who held both and accounts were entitled to 600 shares.

Apparently, just over 150,000 members applied for and received those free shares.

Members were also offered the chance to buy further shares at the flotation price of 180 pence a share.

For many current shareholders, those free shares are the basis of their continuing holding in the company.

As they paid nothing for the shares, they will be deemed to have a base value of zero.

Clearly, anyone who applied for and bought further shares from the company at the 180 Irish pence (€2.28) strike price, or later at any other price, will consider that purchase price as the base value of their shares.

For members who hold both free and acquired shares, each portion of the holding will have a different base price.

The price at which shares were quoted when free shares were issued is irrelevant. The critical thing is assessing any capital gain or loss is the price you yourself paid for the shares.

The situation is complicated somewhat by the fact that some of the shareholders in the humbled Irish Life & Permanent had originally acquired their shares with the even earlier flotation of Irish Life (in 1991).

There were no free shares in that exercise apart from some issued to employees of the business.

If, as a former employee, you received free shares at that time, they are, again, valued at zero at the time of purchase. If, as a former policyholder with Irish Life, you acquired shares in the flotation of that business, the base cost will be the price you paid at that time – 160 Irish pence (around €2.03 in “new” money). An interesting footnote is that, at the time, the Irish Life flotation was the biggest in Irish history.

More than 27,500 of the group’s roughly 385,000 policyholders took part and, to be fair, many of them will have made a tidy profit.

So what does that mean now that the shares have been consolidated with original investors now holding one new share for every 100 shares they originally held in the business?

Well, if the original shares were free, they have suffered no loss – notwithstanding that the shares plummeted from €22.45 in February 2007 to around 13 cent ahead of their nationalisation. In fact, difficult as it is to appreciate it in the current circumstances, you are still in profit on the exercise. Clearly, if you paid for the shares, you have made a significant loss.

The shares are now trading around the €4.30 level but remember that that is on the basis of the one consolidated share. That equates to 100 of your original shares, so the current value per original share is roughly 4.3 cent.

If you were an original Irish Life shareholder, you are nearly €2 a share in the red on the deal if you were to sell now and you could set that against gains from other asset sales.

You may wonder, given how far back these two flotations occurred, whether the issue of indexation comes into the equation.

A long-dead phenomenon, it was designed to adjust the base price of any acquired share upwards to allow for inflation. However, you cannot use indexation to exacerbate a loss so it clearly does not apply to holders of Irish Life & Permanent (now Permanent TSB) shares.

Hold out or cash Standard Life cheque?

I retain my cheque from Standard Life in the hope it may have to be returned when someone with authority intervenes and corrects the carelessness over their payout which irks so much. Dumb?

Mr B.R., Limerick

I’d cash the cheque.

There is only one prospect of a change in your position regarding a tax liability on the Standard Life payout and that is if Minister for Finance Michael Noonan can be persuaded that people have been left out of pocket through no fault of their own – and quite possibly as a result of actions by the State-owned postal service.

So far, it has to be said, he has set his face against such a move, arguing that the Standard Life debacle differs from last year's Vodafone fiasco (where he did intervene) in two critical areas:

First, those Vodafone shareholders in Ireland were largely former investors in the flotation of the State telecoms group – Telecom Éireann (Eircom). As such, he, as minister, professed concern at their “inadvertent” loss;

Second, and marginally more credibly, he noted that those Vodafone shareholders were still at a loss on their original investment, and that the return of value problems only made that loss worse. Investors in Standard Life are certainly not at a loss on their original investment. It still seems very odd that the State would intervene on such a basis with one group of private sector shareholders and not another. Whether it is open to legal challenge is a different matter altogether.

Still, the Minister has left open the door by stating that he will continue to listen to his advisers on the issue and that they would be liaising with Revenue, as they would do generally on tax anomalies as they arise.

Getting back to your own position, holding on to the cheque will harm no one, except possibly yourself. As cheques are valid only for a certain period of time, you might eventually have to ask Standard Life to reissue yours.

In doing so, they will certainly not change the heading under which it is paid (from special dividend to capital), but they may well charge you an administration fee for the privilege, adding insult to your current sense of injury.

Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara St, D2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.