An Irish Times guide to the world of personal finance.
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.
Stamp duty
My wife and I bought a new holiday home in the country. Do we have to pay stamp duty and how much? Are there any benefits for senior citizens?
Mr P.G., Dublin
You will certainly have to pay stamp duty on this holiday property, which is essentially seen as an investment property. The good news is that changes in the last Budget mean that stamp duty will be less than the draconian amounts levied earlier in an attempt to chase property investors out of the market.
There are no discounts for senior citizens.
AVCs
I am concerned about the performance of Irish Life-run AVC [additional voluntary contribution\] fund, which is the scheme my employer facilitates. I hold such an AVC, commenced in March 1994. The funds were split into 70 per cent active fund and 30 per cent guaranteed fund. The value of my fund now is €24,315. Total payments to date were €19,613.
I make that a gross return of 23.97 per cent.
Calculated on the basis of an average of 50 per cent of the contributed amounts, over the eight-year period, this gives a growth of about 3 per cent per annum. Guestimates of future performance, given in Irish Life literature, ironically, are 8 per cent.
I know stocks have been hit recently but, over eight years, this is very poor performance. Are there any better-performing AVC investment schemes? If so, as a general principle, is it possible to switch to one of these?
Mr M.B., e-mail
To be fair, everyone is suffering a little pain with the AVC funds in the past year or so. Having said that, the sort of return you outline looks poor when you consider you are talking about an investment dating back to 1994 - a period that includes the bulk of the most extraordinary market bull run in living memory.
A couple of things are worth remembering. The first is that companies are constrained by the regulators on the sort of illustrative returns they can include in their promotional material. Second, the figures given by Irish Life and others are estimates of likely return - there is no guarantee that performance will equal this figure.
One of the merits of investing through an AVC scheme facilitated by your employer is the prospect of lower charges. Most members of company-facilitated AVC schemes will pay far lower charges on those investments than they would if they invested the funds directly in a personally arranged AVC.
It is your money and you should be checking on the level of charges levied so that you can compare these with other providers. Second, you should be talking to your company's pension fund trustees about the performance of this AVC fund and question what they are doing to address it.
Moving fund is possible, although it carries with it no guarantee of better performance. You need to look at fund management and, indeed, fund mandates. It may be that your AVC fund has been managed in a cautious way in accordance with the wishes of the trustees. It is also true that some fund managers operate better in a rising market, others in a falling market. The performance of your particular AVC would indicate that they have made the best of neither. Irish Life has not topped pension fund tables over the medium to long term recently but neither is it the worst.
Exit tax
On grounds of age and income, I am currently entitled to a refund of DIRT (20 per cent) on my investments. Am I entitled to a similar refund of "exit tax" (23 per cent)?
H.O'B., Waterford
I am not aware of any dispensation on exit tax - the tax payable on withdrawal of money from unitised investments - on the grounds of age, although you are quite right that there are dispensations on the grounds of age and income on DIRT.
Wills
My aunt died recently. She previously told me I was in her will. We have not heard anything. How do I go about finding out what happened to her will and her share of the house? We heard that someone bought the house from her for a very low price. Can you guide me to where I can get any information?
Ms E.M., e-mail
The easiest way of finding out what has happened with any will is to contact the solicitor of the deceased, if you know who that was.
They will generally have held the will and may well have been the executor.
If you are concerned about whether the will has been executed and probate granted, unbeknown to you, you can always check with the Four Courts in Dublin. All executed wills are logged there.
Cash transfers
What is the cheapest way to transfer money across the euro zone? I am expecting my family in France to contribute to a deposit for a house but do not want to lose out 10 per cent on transfer fees. Are euro travellers' cheques a good option?
Ms C.G., e-mail
I imagine a bankers' draft would be as cheap as any other way to transfer money across the zone in these circumstances, although you would be well advised simply to ask the banks at either end of the transaction for their view.
