My wife, my son and I involved ourselves in the Eircom shenanigans (£500, £300 and £500 respectively) and, as a result, we are now owners of Vodafone shares. We do not hold share certificates.
Vodafone
If we now wish to dispose of these shares, what is the least costly way of doing so? What is the likely cost? What information must we supply to the stockbrokers, e.g. account references from dividend counterfoils? Would there be any advantage in offering the shares for sale as one item, or would we be charged a separate fee for each of the three transactions?
Mr S.MacC., Dublin
The cheapest way of selling shares in Vodafone is through the company's registrar, Computershare Investor Services, which operates a postal and a telephone shares dealing service.
The postal service, which is available only to those people holding less than 1,000 shares and looking to sell the entire holding, costs £12.50 or €19. In your case, you are talking about three distinct holdings and they cannot be grouped together.
However, you will need to get your holding - which I presume is held electronically - converted into certificate form. Whichever broker holds your shares electronically will certainly charge for this. The alternative is to get your broker to contact Computershare on your behalf but that would probably negate the cost advantage of the deal.
If you have lost the certificate, you can get a new one from the registrar, Computershare, but that will cost around €40 per certificate.
The postal option runs only via Computershare's in Bristol. The address is:
Computershare Investor Services plc,
PO Box 82,
The Pavilions,
Bridgwater Road,
Bristol
BS99 7NH
England.
Phone them first on 0044 870 7020198 to check on the documentation required.
The telephone option is more expensive, with a commission of 1 per cent (minimum charge £22.50). With this service, there are no forms to be filled out in advance and the price secured for the shares can generally be confirmed while you are still on the telephone. It operates between 8 a.m. and 4.30 p.m. on a UK number 0044 870 7030084.
The one thing you will need is the 11-digit shareholder reference number (SRN), which you should find on communications from the company or from Computershare.
The sale proceeds can be paid to you in euros or sterling.
Before you embark on this, I would suggest you contact whichever broker holds your shares electronically and check what it would cost for them to execute the deal.
Finally, Computershare's Irish office on 2163100 will try to answer shareholder queries on Vodafone.
Property
We are moving house and have decided to retain our existing main residence and let it. The amount of the loan approval is based on a percentage of the value of the new house and the existing one. Are we allowed to offset the rental income against any of the interest payable on the mortgage?
Ms T.S., email
The simple answer is no. I know it is tempting to assume that, because you are taking out a mortgage secured at least partly on the property that is to be rented, you should be able to offset mortgage interest against rental income but the rules are quite clear.
As Ms Sarah Wellband of Rea Mortgage Services explains, the law only allows the offsetting of mortgage interest against rental income when the mortgage has been taken out to "purchase, improve or renovate the premises".
Clearly, in this case, the house you are looking at renting, your existing home, is already acquired and there is nothing in your letter to suggest that the element of the mortgage granted on the basis of the value of this property is required for its renovation or improvement.
The only relief you will get is the standard mortgage interest relief, which should be credited at source by your mortgage lender. For a married couple that are not first-time buyers, you would be entitled to relief on up to €5,080 in interest this year. As mortgage interest relief is a tax credit, the bottom line benefit to you is effectively 20 per cent of this - i.e. €1,016.
Mortgages
We are looking at buying a new house but want to retain our existing property. Is it possible to get a mortgage on both properties independent of one another?
We want to take a normal repayment mortgage on our new home. On the other property, we are looking at having the rental income cover the mortgage. There is no mortgage currently on our present home.
Would we be eligible for an interest-only mortgage and would this be a sensible option?
Ms S.B., Dublin
There are a growing number of questions along these lines coming through recently. It is slightly worrying that people seem to be extending themselves precisely at a time when the property market is finally running out of steam and interest rates are beginning to rise.
It is usually the case that the first people to get burned in any investment fad are the last ones to jump on the bandwagon and there is no reason to suppose it will be any different with property.
While no one is suggesting that property prices are going to plummet, rents have been easing for almost three years.
On the other side, the cost of the money you are borrowing is going to rise as interest rates break out of the four-year slide that has seen European central Bank base rates fall from 4.75 per cent to 2 per cent.
However, assuming you do proceed, I understand there is nothing to stop you taking out a mortgage on each of the properties separately. The principal issue, as always, with mortgages is affordability. That really is all the lender is interested in but that will mean them assessing your ability to pay both mortgages.
While each lender will play it differently, it is likely that, in a case like this, they will adopt a cautious view of rental income and also bear in mind that most interest-only mortgages tend to be only for up to five years - at which point the lender will offer a range of options.
You will need to be confident and to convince the lenders at the outset that you will be in a position to meet repayments on both loans at that point.
Of course, the lenders will always have a lien on your property but financial institutions have no desire to lend on the basis of probable repossession.
So, in theory, there is no reason you cannot proceed as you plan, provided you can find a lender(s) willing to accommodate you. In practice, you would want to do your sums very carefully. Bear in mind also when working out your sums that you will not be able to claim mortgage interest against rental income as explained in the answer above.
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. No personal correspondence will be entered into.
