Dominic Coyle answers your financial queries:

Work overseas may hit SSIAs

I opened an SSIA account in early 2002 and have been making regular payments ever since.

The problem is that one year and eight months after opening the SSIA account I was posted overseas for work and I have remained away ever since, although I kept up the repayments throughout. Essentially by the time my SSIA matures I will be out of the country for three and a half years of the five-year period.

When I contacted Bank of Ireland (anonymously) they said there was a cut off period set by the Government, stating that you had to be resident for at least three years in Ireland to qualify. I cannot check this out with the Revenue Commissioners because they ask me for my personal details, which obviously I cannot give them in case they flag me up as being ineligible.

I really need to know if I am now ineligible for the full amount of interest. I know many of my ex-pat friends are in a similar predicament over here and would appreciate your advice.

Mr P.D., email

I can see that you wouldn't be rushing to disclose your details to all and sundry in authority, given that the personal financial cost to you might be significant enough. As you have heard, there are fairly strict residency rules regarding eligibility for Special Savings Incentive Accounts (SSIAs) even if they are not quite in line with what you have been told by the Bank of Ireland.

The important thing is that, in order to hold an SSIA, you must be either tax resident or ordinarily resident in the Republic. In your case, the only relevant issue is whether you are ordinarily resident in the State in legal terms.

You become ordinarily resident in the State once you have been tax resident here for three years. Once you are ordinarily resident, you retain that status for three full tax years after the year in which you leave the country - as long as you continue to pay tax in Ireland on income other that money earned wholly in the execution of your work abroad.

If you set up the SSIA in early 2002, it will not mature until early 2007. On the basis, if you left the country before the start of 2004, you are not eligible to hold or invest in an SSIA.

Of course, if you were to return to Ireland before the end of 2006, you could have been out of the State since any date after January 1st, 2003 and still be eligible.

If you are no longer eligible, the SSIA must be closed and 23 per cent tax is due on the whole sum - the already taxed income you used to make your contributions, the Government bonus and any gains or interest.

There is little point staying silent in the hope of slipping through as the institution is obliged to check that you are eligible before paying out on your SSIA.

PRSI relief for self-employed

I have been advised by the PRSI refunds section of the Collector General, Limerick, that the PRSI refund will only apply to Schedule E (employment income) and not to Schedule D Cases I & II (self-employed trading and professional income).

Your reply to the reader's question clearly states that the refund is available for self-employed persons.

This is not Revenues view, as advised to me. I have read the relevant Statutory Instrument (S.I. No. 698 of 2003) and I have to say I am in agreement with Revenue's interpretation.

I would be obliged if you can clarify the matter as your comments could lead to the filing of inappropriate claims with Revenue.

Mr E.C., Dublin.

Getting something wrong once is embarrassing. Doing it twice after being asked to confirm it is downright annoying - both for me and, more importantly, for the people who rely at least in part on this column for guidance on rights and obligations in relation to financial matters.

I must have heard from a goodly portion of the accounting profession and others in financial services this week on this issue.

Unfortunately, I was categorically assured last week by the Department of Social and Family Affairs that contributions to pension funds were eligible for PRSI relief, regardless of whether the individual was self-employed or under the PAYE system.

Despite a request for details on the issue from Revenue, none were forthcoming.

My very forthright reply last week was based on that advice from the Department of Social and Family Affairs, which is responsible for matters concerning PRSI. Clearly, that advice was wrong.

The situation is that self-employed people do not have the facility to claim relief from PRSI on pension contributions. This is clearly an anomalous position and increasingly at odds with the Government's avowed commitment to encourage voluntary contributions to pension savings. But there it is.

The 2003 statutory instrument facilitated PRSI relief on contributions by Schedule E taxpayers (effectively PAYE taxpayers) to pension funds - particularly on payments to pension funds over those made through the employer via a tick-off system.

As Mr E.C. points out, the last thing taxpayers, practitioners or the Revenue needs is the hassle and timewasting involved in inappropriate claims.

In relation to separate queries stating that correspondents have been told there is no section in Collector General's Sarsfield House dealing with PRSI refunds, the Department of Social and Family Affairs reiterates that such queries should be directed to Customer Service (PRSI refunds) at the Sarsfield House office of the Collector General.

Capital gains tax and spouses

I wish to sell some shares, and I will gain a profit of approximately 5,000. I bought the shares in my name over the last four years.

I have been married for five years. Can I avail of my wife's capital gains tax allowance?

If not, can I put the shares in our joint names before I sell, then sell and have a combined capital gains allowance?

Mr S.McM., Monaghan.

The Revenue's position on the most important element of your query - whether you can avail of your wife's capital gains tax allowance on shares (or any other asset) held in your name - is very clear. No.

Former finance minister Charlie McCreevy's reform of the capital gains tax regime that saw the tax rate slashed to 20 per cent also laid down that there was no transferability of allowances - even between spouses.

Can you transfer the shares into joint names? Yes. There is a form available from the Revenue that will allow you to transfer the shares into both names. That will allow you to avail of both individuals' CGT allowances although you will pay some stamp duty on the transaction.

You should first check out what your liability it. You say your gain is €5,000, but are there any losses that need to be offset first before assessing overall gain? Have you taken into account indexation to allow for the impact of inflation on your share purchases up to 2002 when it was abolished?

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.