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.

Stamp duty

With regard to stamp duty on house purchase, how does one qualify as a first-time buyer? Would it count if, having lived in England for a few years, one had just sold your house there before returning to Ireland? Also, is there a ceiling on the price of the house purchased or on its square footage for the house to qualify?

C.T.B., Dundalk

Since the house has been sold before your return to the Irish jurisdiction, that end of the deal is not relevant. What you don't say is where you were resident for tax purposes when the English house was first bought. If you were tax resident in the Republic at the time, you would not be considered a first-time buyer; if, on the other hand, you were tax resident outside the State, you would now be considered a first-time buyer on any newly-built house purchase following your return to the State.

That is the situation vis-a-vis stamp duty exemption. There is also a first-time buyer's grant, for which you will need to satisfy certain other conditions. Chief among these is that the house needs to be newly built. The purchase of a second-hand house makes you ineligible for the grant.

There are also some other restrictions. The floor area of the house must be between 410 square feet and 1,346 square feet (38-125 square metres) and the builder must meet certain standards on both the construction and the tax front. The house also has to be occupied by you as your normal place of residence.

Income abroad

My husband and I are currently living in Australia. My husband is working for an Internet company. This company intends to float on the Nasdaq within the year. My husband will be given stock options which are only available to employees. In addition to this we have also made a private investment in the company of approximately £40,000. My questions are these: 1. We jointly bought the private shares but currently they are all in my husband's name (the company had a restriction on the number of investors). Are there tax implications if he transfers half of these into my name? 2. After flotation, if we decide to move back to Ireland what are the tax implications?

Ms P.L., e-mail

I cannot speak for Australian law, but there is no restriction or tax implication on transferring shares between spouses under Irish law. I would be surprised if the situation is not the same in Australia as most states where the law is based on the British system tend to treat married partners in this way. But you would need to check it out locally.

On the subject of the tax treatment should you return to Ireland, there are a couple of issues. First, in relation to any shares, capital gains would be chargeable on any profit from those shares when they were subsequently traded. There is a £1,000 (£1,269) per person per annum tax-free allowance on capital gains but this is not transferable, even between spouses.

Capital gains of 20 per cent is then charged on all gains, after the factoring in of indexation to account for inflation since the share purchase and other expenses incurred in the transactions.

In the case of stock options, your husband would face an income tax charge on the difference between the option price and the market price at the time the options were exercised, presuming the exercise of such options took place after any return to the Republic. Thereafter, he would face a capital gains liability on any further profit he made on the shares.

Capital gains

In a recent reply on the correct way to offset losses against capital gains, you stated that in the case of a transfer of shares as part of an inheritance, the starting date for capital gains' purposes was the date of actual transfer rather than the date of death. This conflicts with advice I was given and on which I acted, so I decided to pursue the matter. I believe that the relevant law is contained in Section 573 of the Taxes Consolidation Act. It indicates gains are reckoned from the valuation at the date of death. Can you clarify the issue for readers?

Mr J.C., Dublin

You are quite right in your view of capital gains tax and death. While capital gains on any asset held by a person die with them, any subsequent gain is liable to capital gains tax. This is important because it can be quite some time between the date of death and the date upon which any beneficiaries receive their inheritance - even in the most straightforward of cases. Given the current volatility in the price of both shares and property, it is quite easy to imagine a situation where a substantial capital gain, or indeed loss, would arise by the time the assets were passed on.

The liability of this rests with the beneficiary and not with any executor or administrator.

Savings Certificates

I have an amount in An Post Savings Certificates in my name and that of my wife and daughter. I am concerned that having my daughter named on these certificates may limit the amount of a forthcoming bequest which she may be able to invest in savings certificates. Can you tell me what the limits are on investment in An Post certificates?

Mr P.H., e-mail

You are right that there are limits on the amount which can be invested in savings certificates, where the interest over five years and six months is free of tax, including DIRT. However, the limits are on individual issues of the certificates.

For instance, An Post is currently offering the 16th issue of savings certificates and these have been the same ones available for investment since December 1998. Within this issue, the maximum individual investment would be £60,000 (€76,184).

As I say, this is the individual investment. Each of those named on the certificates is entitled to invest £60,000 so, cumulatively the three of you could invest £180,000 in the current issue.

There is no limit on the amount you can invest over a number of issues beyond the requirement to respect the upper investment limits within each issue.

In terms of current investment, while savings certificates provide a guaranteed return, the rate of return they offer is similarly conservative. This is especially true at a time like this when interest rates are rising. This rate of return for the current issue was set in December 1999, when rates were low and falling in the run-up to the introduction of the euro.