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.

Housing

I refer to your reply to the questions posed by Mr K.L., from Dublin a few weeks back in relation to issues raised by his purchasing a property with his brother and whether he should sell his existing home or not. I would be obliged if you could recheck the facts in relation to answer (e). It is my understanding that should a person buy a second property, to use as their principal residence, and then subsequently rent out their original house, the following would apply: (1) They would not be liable for the 9 per cent stamp duty on the second house, as it is going to be their principal residence. (2) They would not be liable for the anti-speculation tax, providing they rented out the first house, are registered with the local council as a landlord and supply the tenants with an approved rent book. I await your views and opinions on same.

Mr G.K., Limerick

Mr K.L. would indeed be liable to the 9 per cent stamp duty, though not necessarily on the newer or second house. As you say, Mr K.L. envisaged using the new house as his principal private residence. As such, it would not be liable to the 9 per cent stamp duty. However, the duty would be levied on the market value of the original home. Otherwise, everyone buying second or subsequent properties would claim them as their new principal private residences purely in an effort to cut the stamp duty rate.

Turning to your second point, it is somewhat academic now that the anti-speculation tax has been rescinded before it ever got off the ground. However, for the record, you are quite right that landlords who had registered their properties in accordance with the provision of the Housing (Miscellaneous Provisions) Act 1992 would have been exempt of the tax if it was still in place.

Taxation

I was wondering if you could assist in some queries that I have. 1. I am currently earning £17,000 gross annually and with overtime/bonuses this rises to £25,000. Up to December I was on the lower tax rate, but since then I have been paying tax at the higher rate. I have left my tax-free allowance at that for the lower rate until the new tax year. Should I change in April or will my £25,000 salary be under the bracket of that for the lower taxation? 2. I am paying £100 monthly into an Eagle Star pension. On the basis of my salary, am I investing too much into a pension fund, as it is my only form of saving?

Mr M.G., e-mail

Tax tables are a thing of the past as of the tax year beginning next month. They have been replaced by a system of tax credits. What happens is that the tax deducted will be calculated on your gross pay over the year - nine months in the case of this unusual short tax year where the Government is trying to bring the tax year and the calendar year into line. The amount of tax deducted will then be reduced by the tax credits to which you are entitled.

Your situation is not absolutely clear in that without your bonuses and overtime, you would this year fall into the lower 20 per cent tax band, which will now cover the first £20,000 of earnings in a full year (£14,800 in 2001).

However, if this overtime and bonuses are institutionalised, you will fall into the higher bracket and pay tax at the higher rate. You would really need to talk to your local tax office about your particular circumstances. In any case, you no longer have to worry about choosing which tax table under which you should be taxed.

On your Eagle Star pension, there are not nearly enough details provided to give a definitive answer. On the information provided, it is most unlikely that you are paying too much into the plan and, in general, it is certainly not too much to be saving per month (you state it is your only form of saving). Broadly, depending on your employment status and age, you can invest 15 per cent of your gross income in a pension, free of tax. In your case, taking the final earnings figure of £25,000, you would be able to invest £3,750 a year in the pension and avail of full tax relief - that amounts to £312.50 a month. Basically, the sum is taken out of your gross earnings before tax is calculated. Even taking the base salary of £17,000, you could put £212.50 a month into a pension and be entitled to full tax relief.

The other side of the equation is the benefits the pension fund yields, as you are only entitled to receive certain maximum benefits from a pension fund. People with personal pensions should regularly check fund performance to ensure they do not need to adjust their contributions downward or, more likely, upward to achieve the pension income they anticipate. At your level of contribution, it is extremely unlikely you will be overshooting your entitlements. However, you may want to consider whether, in fact, you need to raise your contributions. The thing to remember is that the older you become, the higher the contribution you will need to make for the same outcome as the money has less time to grow.

Company law

I have been invited to join a "Company Limited by Guarantee" involved in voluntary community affairs. If I accept, what are the main legal obligations I'd be taking on by being a member of the board and could personal liability arise?

M.L., Kerry

There are two types of company limited by guarantee. One has share capital, the other doesn't. In the case of a company limited by guarantee having share capital, your liability - which is the bottom line - is limited to the amount the members of the company have undertaken to contribute in the event of it being wound up, plus any money owing on the shares held by the various members.

In companies limited by guarantee and not having share capital, you are limited only to whatever amount the members of the company have agreed to contribute in the event of its being wound up.

The latter is usually the company type used by voluntary community organisations of the sort you describe. Usually the amount members agree to contribute in the event of the company being wound up is a nominal £1 or so. This money is payable if the company is wound up while you are a member or within a year of your having been a member.

The figure for the company that you are being invited to join would be found in the memorandum of association for the enterprise, which will exist. That memorandum should also state the objects of the company.

You will also need to check that there are proper structures in place to ensure that any profit arising from the company's activities is ploughed back into the enterprise as such companies cannot pass on profits to members as there is no share capital.