Dominic Coyle answers some of your financial queries.

Exit tax: Capital gains tax is 20 per cent payable the October following the disposal of shares, property or whatever. Why then are gains on shares or property in unit-linked funds and with-profit bonds acquired since January 1st, 2001, taxed at 23 per cent? The tax is paid over by the assurance company immediately - not the following October.

There can be no justification for capital gains on assurance-linked funds to be taxed at above the CGT rate. This anomaly was not attended to in the Budget. Can it be tackled in the Finance Bill?

Mr J.O'S., Dublin

There is, of course, nothing to stop the Minister for Finance introducing additional measures into the Finance Bill over and above those mentioned in the Budget but, with most people happy at Mr Cowen's maiden effort, it's a fair bet that there will be no additional goodies in this year's enacting legislation.

To be fair, even if he was minded to offer additional proposals, it is highly unlikely the measure you seek would be among them.

The tax to which you are referring is exit tax and it is calculated at the prevailing lower rate of income tax plus three percentage points. It has nothing to do with capital gains tax but rather with income tax. If, for instance the basic income tax rate were to fall to 18 per cent, then the exit tax rate would become 21 per cent.

As you say, the exit tax regime came into force in 2001. However, the previous regime was, if anything, less advantageous to the investor. Under those rules, tax at the basic rate of income tax was charged on profits within the fund every year. So in a good year, you paid your 20 per cent with no provision to allow an offset against a year when the funds might perform poorly or even lose money.

Under the new gross roll-up system - which, by the way, is the more prevalent globally - the Revenue forgoes this annual tax return. Instead, it takes its tax slice when the fund matures or is encashed. The three percentage point differential is the compensation for the Revenue for delaying its tax take on fund profits.

From the investor point of view, the system is better for two reasons. First, all your gains remain in the fund to generate further profits.

Second, by taxing the fund at maturity, it gives the investor the benefit of paying tax on the overall performance of the fund rather than the performance in any given year.

You will still see both net and gross funds listed on the Unit Funds page of this supplement every week. The net funds are ones set up prior to 2001 in which people still have some money.

Adult allowance: When I first read the question submitted to your column by Mr B.M., Cork last Friday, I thought your answer would resolve my question about the same fictional couple and their interest in the Budget. However, on rereading it I see he did not specifically ask how Alice satisfies the conditions for a qualified adult since she herself has an income of 9,000.

This is of particular interest to my wife and I since all our worldly goods are in joint names with the result that she officially has an income from rents and dividends.

I had assumed that, when I turned 66 next year, I would be entitled to a contributory social welfare pension but not to the extra amount for my wife (who does not qualify for a pension in her own right) in view of her income. Please tell me that I was wrong.

Mr.P.J.C., Dublin

I'm afraid you aren't wrong. The Alice you refer to was one of a series of "illustrative couples" put together by us in conjunction with PricewaterhouseCoopers for the purpose of assessing the impact of the Budget on people in different financial situations.

Unfortunately, the original profile mentioned that Alice's husband Mark would be entitled to a full qualified adult allowance on his contributory old age pension in respect of Alice who "earns" €9,000 a year in dividends on her investment portfolio.

What that failed to take into account was that the qualified adult allowance is a means-tested payment. At the top end, it can add up to €129.20 to a weekly contributory old age pension payment where the qualified adult is 66 or older. However, the qualified adult would have to have a weekly income in their own right of no more than €88.88.

The payment works on a sliding scale, with pensioners receiving at least some payment for qualifying adults earning up to €210 a week (rising to €220 in January).

More to the point in "Alice's" case, there is also a mean test on capital assets (savings and investments). A formula used by the Department of Social and Family Affairs to assess the impact of such savings on income allows full payment of the adult allowance in relation to people with savings of up to €53,000. This with savings of between €53,000 and €79,000 would be entitled to some payment.

However, people with more than €79,000 in savings do not qualify for this allowance. While the Alice example does not explicitly state how much she has in investments, the annual income of €9,000 indicates savings of around €225,000 at a dividend yield of 4 per cent and that would ptu her well beyond the parameters for the qualified adult allowance.

Stamp duty: The Budget has changed the rules on stamp duty for first-time buyers but I am confused as to whether they apply to me. I am a first-time buyer and have exchanged contracts on the purchase of a house, which is not newly built. I thought the new rules would apply to me but an article in The Irish Times last week said that to be eligible contracts would have to be exchanged after the Budget. Is that so? If it is, what can I do? Should I walk away from the contract I have recently exchanged and start again? And will I face a higher price in that event as the seller looks to capitalise on the greater funds I would have available without the burden of stamp duty?

Mr D.D., Cork

You're right that the rules on stamp duty have changed and they work in your favour so don't go doing anything hasty like walking away on your existing deal. Unfortunately, there was some confusion last week as to who exactly was in a position to benefit from the new regime and when it would kick in.

As you say, a piece in the paper last Friday indicated that only those people who had not yet exchanged contracts would be able to avail of the new lower stamp duty rates for first-time buyers purchasing second-hand properties. That is not so. The crucial point is the exchange of deeds - which occurs later in the process - not the exchange of contracts.

In fact, the exchange of deeds is when the sides close the deal and exchange keys. As long as you have not reached that stage, you will qualify for the new stamp duty regime and that is some saving. Under the Budget measures, first-time buyers will be exempt from stamp duty on second-hand homes up to the value of €317,500 and will pay reduced levels of stamp duty on properties worth between that figure and €635,000.

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.