Please send your queries to Dominic Coyle, Q&A, The Irish Times, 11-15 D'Olier Street, Dublin 2, or e-mail to dcoyle@irishtimes.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.

Friends Provident

I was surprised at the recent report on the demutualisation of Friends Provident (UK) and the news that Friends Provident in Ireland, now known as Friends First, demutualised in 1991. I took a with-profits policy with Friends Provident in Ireland in 1997 and thought I was joining a mutual. I was not informed that it was totally separate from the British group. Having said that, I would like to know why I cannot find any listing for Friends First or Eureko in any stock market report?

Mr T.M., Kerry

It is true that the Irish element of Friends Provident demutualised in 1991 although holders of withprofit policies at the time did not receive the sort of windfall with which we are more familiar now. Instead, the assurer paid out £10 million (€12.7 million) by way of bonuses on the policies themselves.

The company insists that it informed its customers then and since clearly about its status, which is at odds with your assertion regarding the policy you took out in 1997. I would suggest you check again all the documentation in relation to the policy. If you are still unhappy, you should approach the company.

As for the listing issue, the reason you cannot find such a listing is that Friends First, as the company is now known, is not a publicly listed company. As such, it would not appear on any stock-market list.

Friends First is essentially a private company which is 75 per cent owned by Eureko, a holding company which operates assurance companies in a number of different countries. Some of the companies within the Eureko group are private and others are publicly listed. That situation may change in the future at the discretion of the company.

Pension contributions

I have recently been made permanent in my teaching job and wish to purchase years of pensionable service which I worked in a temporary capacity. Up to now, tax relief on these contributions was granted only up to a maximum of 15 per cent of net relevant earnings. Was there a change in this limit in the Finance Act? If so, does it apply to teaching/public service?

A.D., Louth

There was a change in the amount of net relevant earnings that could be invested in pensions free of tax in the last Budget. This introduced a sliding scale of contribution limits, depending on the age of the pension policy contributor.

Unfortunately for you, these provisions relate to the self-employed and people in non-pensionable employment who take out a personal pension. It also includes certain others, like sportspeople, who have only a short period of time in which to accumulate earnings and, therefore, pensions benefits.

Those of us in occupational pension schemes - including teachers, who come under public service pension rules - are still stuck with the 15 per cent rule.

Endowment policy

I was resident in London for 10 years until, like so many other ex-pats, I returned to Ireland last year. In 1995, I took out an endowment policy in England with Legal & General. I have maintained the monthly premiums on it since I returned. However, I have recently been told that because it is a foreign life assurance policy, it will be subject to Irish capital gains tax (CGT) when it matures, even though Irish policies are exempt from CGT. Is this correct? If so, surely it is contrary to EU law? The most annoying part is that the early years are the worst time to cash in such a policy because of the front-loaded charges on endowment policies. If the policy is going to be subject to Irish capital gains tax, how will my gain be calculated?

P.O., Limerick

You will not be surprised to learn that, like many areas of cross-Border law in the European Union, this is a grey area. In my own opinion, the simple answer to your question is that you are right, and right again.

As it stands at the moment, the taxes consolidation Act 1997 does provide that foreign policies are liable to capital gains tax upon maturity while there is an exemption for Irish policies. Within the European Union this is blatantly inequitable, especially given that it arises often in situations where people are exercising their rights under European Union treaties to work in any state within the Union.

The problem is that the member-states have not yet sorted out proposals for tax harmonisation across the Union. Indeed, there is strong disagreement over whether they should do so.

In your favour, there is one piece of case law in Europe, which seems to bolster your argument that such policies should be equally treated across national boundaries, although the circumstances are somewhat different.

The case (Jessica Safir v Skattemyndigheten i Dalarnas Lan, formerly Skattemyndigheten i Kopparbergs Lan) certainly sounds a bit of a mouthful but it is worth a read, even if it takes a while to get through all the legalese.

Basically, it addresses the way life assurance is taxed, depending on where the group providing it is based. It was taken under EU obligations on freedom to provide services and free movement of capital within the EU.

I know your situation relates to your geographic mobility rather than that of the policy provider, but on my layman's reading of the case, it would appear this 1998 judgment would provide you with the bones of an argument with the Revenue. In essence, it ruled that national legislation could not impose different tax regimes on savings products by virtue of the fact that they were provided by institutions within - versus outside -the state. That would seem to imply that the Irish situation is contrary to EU law, although you would need to get a proper legal opinion on this.

You will find the details of the case on the Courts of Justice element of the EU website at http://curia.eu.int/jurisp/cgibin/form.pl?lang=en . The case number which you will need to enter is C-118/96. You are quite right about the futility of cashing in such policies in the early stages as front-loading of charges means a large portion of the money you have invested in the policy has not been invested for you but has gone to pay the policy provider.