Telecom shares not received

My girlfriend and I recently invested a small sum of money in Telecom Eireann shares jointly in the hope of making a small but quick profit. On July 7th, the amount in question was removed from our joint bank account. Despite this we have not been allocated the number of our nominee account. I have been in touch with the registrar's office at Telecom Eireann by both phone and letter but to no avail. The only thing I have managed to confirm is that neither of our names appears on the register of members, nobody in Telecom seems to be willing or able to discuss the return of our funds to our account. Should I be in contact with my solicitor about this, or can you suggest any other possible course of action?

Mr G.H., e-mail

I've heard of people failing to get registered even though they believed they were and of people failing to get the number of shares they assumed they would, but I have to say this is the first instance of someone getting neither their shares nor the money taken by Telecom to pay for them. The simple answer is that you should certainly contact your solicitor if you can get no satisfaction from the group.

After all, it is a matter of record, verifiable through the bank clearing process, that the money was taken. If that is so, there is no reason why Telecom or those who organised the initial public offering of its shares should not be aware of the fact.

If they have taken the money, and if you met the qualifying criteria and correctly completed your application form, you should have received some shares at least. If, as you say, the amount applied for was small, it is likely you would have received all or close to what you sought.

If there was any problem with you meeting the criteria or filling out the form incorrectly, the money should not have been taken from your account as you would not have been eligible to receive shares.

In any case, if no shares were allocated to you - and they would appear on the share register if they were - you are certainly entitled to your money back.

Having myself been passed through four offices in chasing up your query, I have a deal of sympathy with how frustrated you might feel at failing to get any explanation of what has happened with your application and/or funds. However, before you do go incurring expenses, it might be an idea to contact the company once again. While there is no record of your name as you gave it to me on the register of members, it might be that a different form of your name was used on the form - for instance, if you commonly use a name other than your first given name in everyday affairs. Equally, I was unable to chase up the registration under your girlfriend's name, as I did not have that information.

Whatever happens, you are due your money or the shares. In addition, it seems likely that you would have a claim for the costs incurred by you in pursuing the company and its agents, including legal costs and interest. But then, that is what you would need to see a solicitor for, if you continue to get no answers from Telecom.

Transferring shares to family

I have a number of shares in different companies in which I don't expect to refund my outlay, not to mention make me a millionaire. I would like to transfer them to some of my family who have time on their side. How should I proceed? Is it expensive? Must I consult a stockbroker or can companies carry out the transfers?

A.O'D., Dublin

While there is nothing to stop you transferring any shares within your family, you do need to be aware that the transaction represents a deal both in the eyes of the Revenue Commissioners and the Stock Exchange, unless you are simply transferring shares to joint names with your spouse or directly to your spouse. There are no special provisions for share transactions involving other family members and they will be treated as members of the public for the purposes of capital gains tax.

This has a bearing on your tax bill and on the stamp duty charged on share transactions. You say the shares in question are currently trading at a loss when compared to the price at which you bought them. In that case, you might consider offsetting that loss against gains on other shares you hold which might be trading at a profit - if, indeed, you have other, profitable holdings - in order to minimise you own capital gains tax bill.

The other tax issue which arises is gift tax. Gifts passed on by you to your family, except to a spouse, are liable to tax at the rate of 75 per cent of the relevant capital acquisitions tax (inheritance tax) rate.

Children are entitled to receive up to around £192,000 from parents free of tax. Thereafter, in the case of gifts, they are charged 15 per cent on the next £10,000, 22.5 per cent on the next £30,000 and 30 per cent on the rest. The point to remember is that sums received are cumulative for the purposes of gift tax. That means, if a child of yours has already received gifts or inheritances of, say £50,000, they can only receive another £142,000 from you before hitting the tax threshold.

Another point: the first £500 in gifts received by a person from a benefactor in any calendar year are not subject to gift tax. The shares passed on by you would be assessed at today's prices when transferred, not at the higher price at which you bought them.

In terms of the practicalities of the transfer, you can receive a stock transfer form from the company registrar for each of the companies in which you wish to transfer holdings. Each company will be able to tell you who is its registrar.

You should not need a stockbroker unless the holdings are complex.

There is a fee for transferring the shares but it is nominal. There will also be 1 per cent stamp duty on the transaction.

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.