PERSONAL FINANCE:Your queries answered
Q
I have a tiny shareholding (now even tinier) in Irish Life & Permanent. Every year I get a fat envelope of material inviting me to the AGM and advising me how to vote by proxy. It all looks very serious and important.
This year’s meeting is in the RDS on May 18th. I have never gone to one or voted as I think it’s a bit of a sideshow and as a small investor, as opposed to the massive institutional investors, my vote is entirely meaningless.
Do most people feel this way? Is there any point in my going or in voting?
- Ms BH, Dublin
A
Nothing is likely to make a shareholder feel as insignificant as seeing their small holding ranged against the millions held in proxies by companies at annual general meetings.
That is no reason to retreat in despair, however. Annual meetings are the single occasion in the corporate calendar when a company chairman and board members have to listen to shareholders, if not necessarily provide the answers sought.
Shareholders in financial institutions clearly have plenty about which to feel aggrieved, though I would not wish to suggest that anyone take the approach of the individual who pelted Allied Irish Bank directors with eggs at one meeting.
Can your small shareholding fundamentally alter the direction of any given vote? On its own, no, not in a company with 276.8 million shares. But with the shareholdings of others in a similar position, it can make a difference as long as people vote either in person or via proxies.
Some larger shareholders globally are increasingly less docile in their approach and, between the two, change can take place.
At the very least, shareholders can get some of their anger off their chests. So go, and vote.
Only realised share losses can be offset
Q
I made a gain of more than €1,250 on shares that I sold last year. However, like many pensioners, I bought and I still hold shares in both AIB and Bank of Ireland, which are showing up to 90 per cent losses. While I have not sold them, may I set off a portion of the losses against my modest gains last year for tax purposes?
- Mr VC, Dublin
A
Many people are in your position, holding bank stock that is effectively worthless. It will not count as a capital loss, however, until such time as the shares are either sold or declared worthless under a full nationalisation of either bank.
In your case, the capital gain related to last year and therefore even an imminent nationalisation would not affect the situation.
Once a loss materialises through the events outlined above, it can be carried forward until it is offset fully, but it cannot be set against gains from previous years.
The annual capital gains tax threshold – below which no tax is payable – is €1,270.
I assume you have also deducted any costs associated with acquiring or selling the stocks before assessing the gain.
Of course, if you made the gain last year, you should have paid the tax by the end of last January.
Assuming you have a small capital gains tax liability, remember that the rate was increased in 2009 to 25 per cent.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.
