Dominic Coyle answers your questions.

Aer Lingus shares for individuals

I see that Aer Lingus has finally announced that it will float on the stock market. However, I cannot find any information on how individual investors can get involved. I assume there is some way to do this?

Also, I note that there is a price range of between €2.10 and €2.70 a share. When will we hear the actual price that we can buy the shares at or are we going to have to buy in the dark as we did with Eircom?

Mr D.S., e-mail

You are right that Aer Lingus has now released details of its plans to float the airline on the Irish Stock exchange. In fact, those details stretched to a prospectus of almost 400 pages. As you can imagine, in a document of that length not much is missing or left to chance. That includes the provision for retail investors to get on board, so to speak.

However, this will be a limited offer, as far as individual investors are concerned. In the first place, anyone looking to invest less than €10,000 is excluded.Your reference to Eircom is very appropriate in this regard. Clearly, with an election less than a year away, the last thing the Government wants is a repeat of the Eircom fiasco where a plethora of small, inexperienced investors dipped a toe in the stock markets for the first time and lost out badly.

The memory of that adventure is still clear in the minds of many people, including the politicians, and the ongoing malaise in the Vodafone stock that people received in the process only serves to rub salt in the wounds.

The Government, which is after all the majority shareholder in Aer Lingus, is in no mood to repeat the experience and has therefore decided to pitch the offer only at people with sufficient financial muscle to weather the cyclical nature both of the equity markets and the airline industry.

For anyone with the wherewithal and interest to pursue this avenue, applications must be made on a "client confirmation form" through one of several stockbrokers.

Any application through such an intermediary must be received by the broker no later than 10am on September 21st. There is no upper limit to the number of shares people may apply for but, in the event of over-subscription, allocations will be scaled back.

Of course, you will be somewhat in the dark when you do this as you will be applying for shares in relation to which you have only a vague notion of price. Aer Lingus has announced that the shares will be priced anywhere between €2.10 and €2.70 and it will not announce the actual flotation price until Wednesday, September 27th - six days after your application must be submitted.

For what it is worth, money being laid with spread-betting firms suggests the company will list close to the mid-point of its range.

However, some traders suggest the ultimate offer price could be towards the lower end of the published range.

It is also worth noting that, as of September 27th, a conditional, or "grey", market will operate in the Aer Lingus stock although the shares will not be listed formally in Dublin or London until Monday, October 2nd. Anyone who holds on to their Aer Lingus shares for a year after the flotation date will receive bonus shares on a ratio of one bonus share for every 20 shares held.

SSIA deals for pensioners

You have recently written that pensioners can avail of the deal offered by the Government to move €7,500 of their SSIA to a pension and receive the €2,500 bonus.

You said pensioners could open one of the Government's new PRSAs for this purpose even though they were already pensioners. I have approached a couple of PRSA providers and they say I am not allowed to do this. Who is correct?

Mr J.W., Dublin

I have had a couple of queries about this since I last addressed the subject and it appears that people going in search of honest advice are effectively being fobbed off by professional financial advisers, who in my view are losing sight of their obligations to the client.

What is most distressing is that the people concerned are the very ones most in need of the sort of windfall that Minister for Finance Brian Cowen announced in the Finance Act - pensioners with relatively low incomes.

Let me be crystal clear. It is entirely correct that a pensioner who has not yet reached the age of 75 can open a Personal Retirement Savings Account (PRSA) with part of the proceeds of their maturing SSIA.

Provided that their income last year was below €50,000, they will be entitled to the €2,500 bonus announced by Mr Cowen.

Should they choose to do so, it is also possible at 75 to move this €10,000 PRSA fund to a more flexible Approved Minimum Retirement Fund that allows people draw down income as they require it, subject to income tax where applicable.

Technically, there is nothing to stop a pensioner withdrawing a quarter of their pension fund tax free in retirement. This is the area that has animated the Department of Finance and, through them, the Revenue Commissioners.

As a result, the Revenue Commissioners circulated what could only be described as a threat to PRSA providers who open funds for pensioners who subsequently access some of the funds.

Effectively, Revenue said that it would endeavour to force the Pensions Board to retrospectively annul any PRSA product where it feels a financial advisor is "encouraging or facilitating" people availing of what is a perfectly legal loophole in the Cowen bonus scheme.

This is the same tax authority and the same Department of Finance that, for years, has said it was powerless to stop some of the richest and most powerful people in the land availing of loopholes in similar incentive schemes until amending provisions were enacted in the Oireachtas as part of a subsequent Finance Act or other legislation.

I have taken this matter up this week with the Pensions Board, the Revenue and the Department of Finance. The Pensions Board confirms that the advice I have given is perfectly accurate and it is a body charged with regulating this area.

The Department of Finance has not managed to respond to queries for three days. the Revenue last night issued "updated" advice which somewhat softened their cough on this issue - expressly stating that "there is no specific minimum period for which a pension product must be held".

It remains concerned that providers would not be acting in a "bona fide" manner in offering a pensions product to an individual " with the sole intention of immediately refunding the monies concerned to the individual".

Any financial adviser that suggests refusing to allow an eligible pensioner open a PRSA and avail of the Cowen bonus should be reported to their own company management, the Pensions Board and the financial services ombudsman.

Any pensioner who has already been denied this opportunity and is now beyond the three-month window for transfers availing of the Cowen bonus should also complain to the institutions concerned and, ultimately, the financial services ombudsman.

UK inheritance tax issues

In 1992, I benefited from an aunt's will. As she was resident in the UK, and all her estate was located in the UK, I had no liability to capital acquisition tax.

I now am to be the beneficiary of another aunt, again a UK resident with estate based in the UK. I am informed that a change in Irish law in the meantime means I have a liability, as my residency for tax purposes now applies.

Could you let me know if I have got the situation right?

Mr J.M., Westmeath

It is certainly true that you will be liable to capital acquisitions tax (CAT) on a legacy from your aunt in the UK as Irish capital acquisitions tax is levied on the recipient of the inheritance or gift.

In relation to an aunt, you are entitled to receive €47,815 before you find yourself liable to tax, but this is a cumulative figure and takes account of all gifts and inheritances received from aunts and other linear relations - siblings, uncles, grandparents, etc - since 1991.

While you may have been exempt on the previous inheritance, you would have to check with the relevant Revenue department to ascertain whether that bequest will be taken into account when assessing your cumulative inheritance under the "linear relations" heading as it occurred since the 1991 deadline.

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.