Dominic Coyleanswers your finance questions.

Minmet share consolidation

Can you explain in lay terms the recent Minmet share consolidation offer of December 2006. I owned 200,000 shares and now have received a share certificate for 10,000 new shares. I have been offered no explanation from the company dealing with the share offer.

Mr J.K., Donegal

Before I go into the details of this scheme, I should point out that the only reason you would have received no explanation from the company regarding the share consolidation is that the address provided on the company's share register has not been updated to take account of any change of address by you since you initially acquired the shares.

Minmet published details of its proposed "Capital Reorganisation" on December 6th. A notice was posted on the Irish Stock Exchange and details sent to the company's 26,300 shareholders.

The proposals were subsequently passed at an extraordinary general meeting on December 28th and activated the following day.

So what exactly did the "capital reorganisation" do and why? The bottom line is that the scheme arranged to replace every 20 existing shares with one new share. Thus, someone like yourself who had 200,000 old shares would find themselves with 10,000 new shares.

However, your relative stake in the company remains the same, as all other shareholders saw their stakes reduced in the same fashion.

In an effort to weed out a large number of smaller shareholders, the scheme also arranged that anyone with fewer than 10,000 old shares (who would in the normal run of things have received fewer than 500 new shares) would, instead, have their holding sold at the prevailing share price and a cheque for the sum paid to them.

Where that cheque was for a sum less than £6.75 (€10.20), the company retained the proceeds.

The company argued that the arrangement allowed these smaller shareholders - whose holdings were "uneconomic" - to exit the company without facing hefty dealer charges on the exercise.

Minmet estimated that, of its 26,300 shareholders, around 20,700 held fewer than 10,000 shares. At the price prevailing towards the end of November last year of less than half a penny (0.49p), these holdings were worth at most £49 or €72.60 - a figure that would be eaten up by dealing charges.

Of course, all this must have been little comfort to people who bought into the company when it first floated on the London AIM market at 1.22p. First, their holdings fell in value by almost 60 per cent and now they were being forced to sell at that low - or possible receive nothing if their holding was around 1,370 original shares or less.

Minmet estimated that the 20,700 shareholders - nearly 79 per cent of all shareholders - between them held shares amounting to around 4.8 per cent of the company.

An additional benefit, the company argued, was that Minmet would save money in administrative costs managing the share register - roughly £85,000 a year - and management time.

The company also hoped that the reorganisation would increase the price at which the shares were trading. That would make the shares more attractive both to investors and, more significantly, as part payment in situations where Minmet was buying another company or part of it.

In any case, the reorganisation was approved and the new shares are now trading at around the 12p mark - although they jumped almost 28 per cent to 15.01p yesterday.

At yesterday's level, your 10,000 new shares are worth £1,500; just prior to the reorganisation, your 200,000 old shares were valued on the market at £980.

Dirt relief

My husband and I are in our early 70s. I have never worked outside the home since marriage, but have always had my own bank account, as has my husband. We also have a joint account, all with the same bank.

I have been saving €50 per month in an SSIA and want to continue, perhaps putting it into AIB's monthly scheme which is paying about 6.1 per cent now. I know it will be taxed but we can claim it back as Dirt tax.

Can I claim it back in my own name or can my husband's name only apply? Separately, can you tell me whether both parents can give a child €3,000 per annum each (remember I don't earn) or is it just one parent?

Ms M.B., Dublin

You are perfectly entitled to claim relief from Deposit Interest Retention Tax (Dirt) in your own name, regardless of whether you work outside the home or not. As the account is in your name, indeed, only you can claim relief on it.

As a matter of interest the Finance Bill published yesterday is arranging for people in your position - pensioners with income not exceeding the income tax threshold - to have the status of their accounts altered so that no Dirt will be deducted in the first place. This is expected to occur some time later this year.

On your second point, your daughter is entitled to receive a gift of up to €3,000 each year from any number of people. The fact that your husband makes such a gift does not stop you making a similar gift.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara 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.