Q&APersonal finance: your queries answered
Q
When someone exercises a share option and acquires shares for less than the market value, they are liable to income tax on the difference between the market value of the shares and the option price. This is paid at the higher rate of income tax. Do the income levies introduced in recent budgets mean there is a further tax liability?
– Mr P C, DUBLIN
A
As you may have suspected, you will face a further tax liability under the income levy. When you exercise an option over shares, it is almost always at a rate less than the current market value – there is little logic in such a move otherwise. As you say, this does give rise to an income tax liability. The amount, known as Relevant Tax on a Share Option, must be paid to the Revenue not later than 30 days after the share option is exercised.
However, the levy is paid at the same time as your preliminary tax payment to the Revenue. If you have not paid the relevant levy with your preliminary tax, you can pay it at the time you make the tax return for the relevant year. For this year, the levy is payable at the rate of 2 per cent on income up to €75,036; 4 per cent on amounts between this threshold and €174,980; and 6 per cent on anything above that.
MUST ATM MACHINES GIVE RECEIPTS?
Q
Increasingly we are told to be on our guard and constantly check our bank accounts due to fraud and skimming devices, etc, on ATM cards. However, more often than not, when I withdraw money from my bank, the machine is not able to issue a receipt despite a receipt request. Is there an onus on ATM machines to issue receipts as there is a financial transaction involved?
– Mr L B, DUBLIN
A
There is no obligation, as far as I am aware, on the bank to ensure its ATM machines issue receipts, although I agree it is infuriating for them to offer the facility and then not deliver one. As far as keeping tabs on your bank transactions, that is your responsibility. I suggest you make a note of them as you go. Your withdrawals should be checked against your bank statement when it arrives. Any discrepancy should be notified to your bank.
SHOULD WE KEEP MONEY IN AN POST CERTS?
Q
My husband and I, both in our 70s, have around €400,000 invested in An Post certs and bonds. Is it a good idea to leave it there after September 2010 or would we be well advised to move out the €120,000 due to mature before that date?
– Ms K R, DUBLIN
A
People are right to be nervous about their savings. But An Post remains about as safe a home for your money as you will find. Its savings certificates and bonds are covered by a State guarantee separate to the current bank guarantees. Nothing is ever absolutely guaranteed anymore, but you should be comfortable leaving your money where it is.
Please send your queries to Dominic Coyle, QA,The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com
This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.
