Please send your queries to Dominic Coyle, Q&A, The Irish Times, 11-15 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.
Share Certificates
It seems to take two months or more after receipt of a contract note before I receive the share certificate. Could a long enough delay deprive me of a dividend? Also what is the procedure involved in getting shares transferred from a seller's broker to a client's buyer's broker?
Mr W.T., Dublin
The good news is that once you have the contract note, you are safe as far as getting your dividends is concerned - provided of course that the shares were not bought during the time when they were ex-dividend.
Once you have the contract note, you can show you are the owner of the shares. It is unusual, but by no means unique, for share certificates to take two months or more to get to you after the deal has been settled. The major problem is not with dividends but with selling on your holding should you wish to. Basically, unless you are well known to a broker, you will find it will not accept a sell order without the certificate.
It really is unacceptable in this high-technology era that you should have to wait so long for a simple piece of paper. After all, it is not as though the market has shown itself lacking in volatility in recent times and an investor could find themselves forced into missing a good selling point by the delay in receiving a certificate.
What happens is that, upon the sale, the old share certificate is returned to the registrar of whichever company the shares are in. As it happens, the same company or firm often acts as registrar to a large number of companies. A handful seems to provide services to most of the constituents of the Irish Stock Exchange list. The registrar then sends out a new certificate to the buyer of the shares. If the seller has disposed of only part of the amount they hold, they will receive a new certificate as well, with the amended shareholding confirmed.
Foreign bequests
My brother died in 1998 in the US, where he had lived for 25 years. He had become a US citizen. He left his entire estate to me. It went to probate in the US and that process is now complete and taxes due in the US paid.
He also had a small sum, about £15,000 (€19,046), in a Bank of Ireland account here. The money was sent here from the US and I have a letter to prove this. I cannot get this money without going to probate in Ireland as the bank tells me that the US probate is out of the jurisdiction and is of no use to them.
Will I have to pay CAT (Capital Acquisitions Tax) on the Irish money and will the probate office require the final details of the US probate?
Will the Irish Government take into account the money which I get from the US when determining how they pay the £15,000 or part of it? Will I have to pay CAT on the US dollars here when I take the money into this country despite the fact that we have a tax treaty with the US?
Ms M.D., Sligo
The first thing to say is that the bank is quite right not to release the money in the account unless it is sure, a) that you have a valid claim to it and, b) that probate has been correctly applied.
You may or may not have to take out probate separately here to release the Irish funds. The probate office at Dublin Castle or a solicitor specialising in the area would be able to tell you, depending on the full circumstances.
The point is that the authorities will need to know whether the Irish deposits have been taken into account in assessing probate in the US.
To determine this, the probate office would probably want, at the least, to see the documents relating to probate in the US to assure itself that everything is in order.
The key issue in determining what tax is due under CAT is the question of domicile. This is a notoriously complex area.
On the limited information you have given me, it seems likely - though by no means certain - that your brother's domicile at the time of his death would have been the US rather than Ireland. But remember domicile is totally different to residence for tax purposes and the fact that your brother took US citizenship and lived in the states for 25 years does not automatically determine domicile, although they would be factors.
On the assumption that he was legally domiciled in the US, you are liable to tax only on those parts of the estate within the local jurisdiction - in this case the £15,000 in the Irish bank account. That, in itself, would not take you over the tax-free limits for inheritances from linear relations - siblings, grandparents, aunts and uncles.
However, you would need to take into account other inheritances you may have received in the last 10 years.
If, however, it emerges that he was domiciled in Ireland, you would have to take the full estate into consideration in determining liability to CAT.
As you say, Ireland has a taxation agreement with the US so any tax you have already paid on the estate in the US should, in that event, be offset against any Irish tax bill.
If there is any doubt or if you feel the revenue is looking at determining your brother's domicile as being Irish, you would almost certainly be advised to get professional legal advice before reaching a settlement on your brother's estate.
If the estate is not settled until the new Finance Bill becomes law, it appears you would only have to consider those inheritances from other linear relations.
The Bill also proposes fundamentally to change the basis of CAT from domicile to residence and that could affect your situation.
