The Irish Times guide to the world of Personal Finance, this week Investment advice and CGT and losses.

Investment advice

A relative of mine has 30,000 but needs advice of the best investment offers. What best investment advice would you give them, as personal savings are not the best at the moment?

Mr C.M., e-mail

I'm well aware that you may find the following view facetious and I certainly do not mean to be but the best advice I can give someone with the sort of money your friend has is to spend a small fraction of it getting unbiased professional advice from an fee-based authorised adviser - i.e someone who is licensed to give information on the full range of products available.

Authorised advisers are paid either by commission or by fee; in both cases they are supposed to give independent advice suitable to the customer's personal circumstances having done a proper "fact-find" to determine what, if any, products would best suit. Being a natural sceptic, I would always opt for fee-based advisers for true independence.

The Central Bank has a list of authorised advisers and should be able to point you in the direction of a fee-based option in your area.

In broad terms, the most important thing for your friend to sort out is their attitude to risk and the sort of return they are seeking on the money. Many people, especially those who are not used to having such a sizeable windfall, are averse to risk.

If that is the case with your friend, you are ruling out direct stock market investment. At the moment, government bonds or gilts appear unattractive and commercial property fully or indeed overpriced - at least in Ireland. That still leaves a lot. At the bottom end, you have deposit savings and savings certificate which are unlikely to match inflation. There is also residential property which, properly chosen, still looks likely to produce a return ahead of inflation, even if the heady days of the 1990s are behind us.

Then there are guaranteed products, which will ensure you get back your original investment - not allowing for inflation in the intervening period, which will have reduced its value somewhat. They also expect to produce an investment return, generally a portion of the gains on the underlying indices or shares, but this is not guaranteed.

Of course, if your friend doesn't mind risk, then all bets are on. The riskier the investment, in general, the higher the potential returns.

CGT and losses

Is it possible to offset a takeover loss incurred on Eircom shares against capital gains on other investment shares to increase the number of such other shares for bed & breakfast relief in any given tax year.

Mr P.McH., e-mail

In general, where you incur a capital loss it can be offset against capital gains in the same year before a liability to capital gains tax arises. Where losses cannot be fully offset against gains in the same year, the losses are carried forward and offset against later gains until they are fully offset.

In simpler words, if you incurred a loss on Eircom - and remember you may still hold some Vodafone shares - you are entitled to set that against a subsequent gain. As you suggest, that has the effect of allowing you to sell, or to bed and breakfast, more shares than you otherwise might before exposing yourself to a capital gains tax charge.

• 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. 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.