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.

Savings

Can you tell me if, as a customer, I can transfer the account holdings from one bank to another under the new Government special savings incentive scheme without incurring any fines/penalties?

Mr M.M., e-mail

It very much depends on the terms of the current account in which you hold the money. Some accounts require a certain notice period before money can be withdrawn. That aside, on an ordinary bank demand deposit or current account there are no charges involved in switching funds from one account/bank to another under this scheme or otherwise.

Of course, there will be the usual transaction charges, but this should not cost much. It is worth remembering that the Minister for Finance has made it clear he will not permit the borrowing of money at one institution to fund savings under the scheme at another.

Naturally, existing rules that require financial institutions to take precautions to prevent money laundering will also apply.

Capital Gains

I purchased a second house in January 1996 for £47,000, plus expenses as I was working down the country. I lived in the house on my own for two years. My family then moved down and we purchased another house. I sold the house in July 2000 for £91,000. How much capital gains tax must I pay and when should I pay it?

Mr D.C., e-mail

With the information provided, it is impossible to answer your question definitively. In the first place, it is not clear from your question whether you now own two or three residences. Did you sell the first house when your family came down to where you work? You say, you sold the house in July last year but when did you buy the home in which you now reside and was the other house rented out between the two dates? These issues will all affect your eventual capital gains tax bill.

More important, however, is whether you availed of a procedure that would drastically cut any capital gains liability. Alongside the arrival of Bacon came a process whereby families who were forced to live in different homes for work purposes - cases such as yours - could certify with the Revenue that such was the case. This certification would be attached to the title deeds of the property. The process would oblige the people using the address to use it as their principal private residence for a set minimum period. It seems clear that you would be covered by such provisions but it sounds like you did not certify the residence at the time you moved down in 1996 or when the initial Bacon proposals were enacted. Whether this can be backdated will have to be checked with the Revenue.

Assuming you are exempt under this provision, you would face a capital gains tax bill on the sale of this second house only if you rented it out for a period between buying your present home and selling the former one, or if there was more than one year between the two events.

In any case, the capital gains liability would be very small, especially once you take your £1,000 capital gains tax annual exemption into account. As to when it should be paid - that would generally be on completion of the deal but certainly with your returns for that tax year - in this case 2000/01.

If the Revenue will not backdate your exemption on working grounds, you face a much larger capital gains bill. There are a couple of things you will need to take into account. The first is indexation and expenses. When calculating capital gains, you need to factor in a multiplier that updates the price paid for the asset to what that sum would be worth in today's terms. In your case, the multiple is 1.116. That would update the £47,000 purchase price to £52,452.

You will also need to take account of expenses incurred both in buying and selling the property, as these will have to be offset against any capital gain. Expenses would include legal fees, advertising costs and estate agency fees.

Marriage

My fiancee and I plan to marry next year. She and her son currently live in a county council-owned property for which she pays rent. I own my own home in which we plan to live when we marry and on which I pay a mortgage. Is my future wife entitled to any allowance in respect of her giving up her tenancy and moving to a private property, thus contributing to a mortgage?

Mr J.O'D., e-mail

It's an attractive idea but I'm afraid the answer, according to the local authorities, is no. Essentially, local authority accommodation is for those in need for one reason and another, who meet the criteria. If someone leaves such a property voluntarily, they are not going to receive a benefit for doing so. If she had moved at the request of the council, that might be a different matter, but it doesn't apply here.

Tax

I am 35 years old and will be moving from the United States to the Republic in a few months. I've sold my house in the US and will have approximately $60,000 from the sale of that US house to apply against a mortgage in Ireland. The US no longer taxes gains on homes sold if you have been residing in the house for more than three years. Will the Irish Government tax me when I bring this money into Ireland?

Ms G.P., e-mail

No. It is no business of the Government here how you earned this money before arriving in this State. When you made the money, you were answerable under US law and only US law. When you arrive here, the Revenue will assume that all monies to date have been legitimately taxed elsewhere, unless there is clear evidence of criminal gain. Equally, there are no longer any restrictions on currency movements in or out of the State.

For your information, the Irish situation in relation to the sale of homes is that you are not liable to tax on the gains at all if it is your principal private residence - the home where you habitually reside - whether you own it for three months, three years or 30 years. You will pay tax on the gains made on any second property, except in certain very particular circumstances.