Dominic Coyleanswers yoru questions
Q I PURCHASED shares in Deutsche Telekom in 2000 and sold them at a substantial loss four years later in 2004. I should have learned after the fiasco of our own Telecom Éireann flotation.
Do I have to write off the Deutsche Telekom loss against a gain within a four-year period - ie before the end of 2008? In other words, is the system the same as it is in the case of income tax that one can go back only over a four-year period?
Due to the present situation in the market, it is not my intention to sell any shares this year.
Mr TM, Galway
AI can see why you would be a little chary of selling shares at the moment. The Irish market as a whole has dropped 42 per cent in the past 12 months, and if you are invested in a number of sectors - notably banks and/or construction - you could be nursing even more dramatic losses on your holdings over the past year.
The good news is that there is no four-year limit on claiming losses against subsequent capital gains.
It is true that when it comes to claiming relief on income tax for items such as health expenses, you are now obliged to do so within four tax years or face the prospect of losing out altogether. However, in relation to capital gains tax, any loss outstanding remains in existence until it is fully offset by gains accruing on later transactions. If you don't fully offset the loss this year - unlikely in the current scenario - it will roll over into 2009.
Q I had a phone call out of the blue by a company called Gold Solutions Marketing AG and was offered shares through a direct share offering. The product they are selling is a credit card that will be backed by gold, which, they say, will have no bad debt. I am very sceptical but curious at the same time of what's on offer. As far as I know gold is effectively worthless and the high price at the moment is built on speculation. Eventually when investors gain some confidence in the market, they will exit the commodity market, which will bring the price of gold down.
I was just wondering what is your take on this product and if you have heard of them.
Mr AF, e-mail
ALeaving aside the general value of gold, which is a mainstream investment regardless of whether its current value is somewhat inflated, this is something you should avoid at all costs.
I have never heard of the scheme you outline - or, indeed, anything remotely close to it. However, as a general rule, if you are being cold-called with an investment proposition, you should steer clear.
Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2 or by 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 questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
