Dominic Coyleanswers your questions.

The €30,000 question

I have €30,000 to invest. I wish to have access to the money over the next two years if I need it. What is the best way to invest my money to gain the most reward?

Ms D L, Monaghan

It will not have escaped your notice that stock markets have been more than usually volatile in the past year. All the signs are that the situation is unlikely to calm down anytime soon.

Already, in the first week of the year, the Irish market has lost more than €3 billion and other stock markets have not fared much better. The same volatility is true for commodities and property.

Any packaged investment, such as unit funds, will invest in one or more of these asset classes. That would be fine if you were looking at the long term, but you say you need to have access to the funds at any time over the next two years.

Essentially, that leaves you looking at bank deposit accounts. The good news is that the current liquidity crisis and increased competition for funds has seen the banks improve the interests rates on offer on secure accounts. You should have no problem getting more than 5 per cent a year on your money and, in the circumstances, that is not a bad guaranteed return.

But don't take my word for it. With €30,000 to play with, you would be well advised to spend a small sum to secure professional investment advice.

Luck of the Irish

In relation to the recent article about the ban on people in Ireland buying UK premium bonds, can I ask what penalties apply if an Irish resident participates in a lottery outside Ireland and the EU and is lucky enough to win a big prize?

J O'C, Dublin

It is rare indeed that we come across questions on issues that are not specifically addressed in the tax code, but it appears you have identified just such an area.

The Government has dictated that Irish residents cannot buy UK premium bonds - the British equivalent of our own prize bonds - or enter any other foreign lottery. This position, under Section 34 (1) of the Gaming and Lotteries Act, 1956, is currently being challenged in the European courts. At issue, really, is whether this is a lottery within the meaning of the Act and, even if it is, is this legislation contrary to EU law?

Nonetheless, a large number of people have such bonds either because they were UK residents for a time or because they circumvented the prohibition.

In general, these winnings are advertised as tax free. However, there is a broad provision that Irish residents are liable to Irish income tax on all worldwide income. This is certainly the Revenue's interpretation of certain large foreign lottery winnings that are paid by annual annuity.

But when it comes to one-off, tax-free windfalls, such as premium bond winnings, the best the tax authorities and advisers can tell me is that such sums do not "fall within the charging provisions" of the tax code. In other words, the tax code does not specifically address the situation. The same goes for other foreign lottery winnings.

Of course, you would first need to prove that the income involved does indeed come from such a premium bond or other lottery.