I read with interest the recent piece on Norwich Union dividends and the position in relation to tax and tax credits. However, on the most recent dividends from Guinness there is no refund claimable in Britain. Why is there a difference between the two companies? Is one adhering to older legislation?

Mr G.M. Dublin

As you say, there certainly appears to be a discrepancy on first viewing. Both these companies are unusual among those on the Irish Stock Exchange full listing in that their primary listings are in Britain and that is where they are headquartered. While they are not alone among British companies in having Irish investors, for differing reasons they have a larger and less professional investor following here than some of their peers. In the case of Norwich Union, it is because of the number of Irish policyholders prior to the flotation; and of Guinness, because of its historical and staff connections here.

The situation has been somewhat confused because Guinness is in the process of merging with Grand Metropolitan to form Diageo. Its most recent dividend forms have carried the clear message that there is no income tax refund available in Britain and no applicable tax credit. This has led some investors to assume, wrongly, that tax credits are a thing of the past and that Norwich Union has been sending out inaccurate information to its shareholders.

What has happened, in fact, is that the October and April dividends from Guinness have been what are termed "foreign-income dividends". This means that the dividends are those yielded by the foreign operations of Guinness/Diageo. As such they are applicable only to overseas shareholders, such as those in the Republic, and do not impact on British tax legislation.

The tax liability in the Republic still stands the top rate of income tax is levied on the gross dividend. Any deductions made abroad can be claimed as relief against the tax bill, provided they cannot be reclaimed through a refund.

In any case, the situation with tax dividends is going to change in the near future in Britain as well as here. From April 6th, 1999, tax credits will be abolished in Ireland they currently stand at 1/18th on Irish-based manufacturing company dividends and 11/89ths on other Irish-based company dividends.

In Britain, advance corporation tax (ACT) is being discontinued from the same date April 6th, 1999. That will bring British tax credits down from the current 20/80ths of net dividend or 20 per cent to 10 per cent. However, from that date no element of the credit will be refundable currently a quarter of the credit of 5 per cent of the gross dividend. However, people abroad will still be able to make a claim against tax under the double taxation accord in place between the Republic and Britain.

Britain's Chancellor of the Exchequer, Mr Gordon Brown, has stated his intention of abolishing tax credits entirely in Britain by 2004.

I am assured by Guinness that the next dividend, which is due in October, will revert to being a normal dividend on the group as a whole rather than the foreign-income dividend of the past year. Under the changing tax-credit rules outlined above, it will be the last year under which investors in Ireland will be able to claim a refund from the British tax authorities. To do so, contact the Inland Revenue in Britain or obtain an IRL/Individual Credit form from the Inspector of Taxes' Claims Sections at 14/15 O'Connell St, Dublin 2.

I want to change shares I own into joint names with my spouse due to the changes announced this year by the Minister on capital gains allowances. I have been told that I can do this through the company in which I own the shares; is this the case or must I go through a broker?

Mr B.D. email

There are a number of ways in which shares can be changed into joint names. You can, of course, go to a broker, but it will levy a fee to cover the administration involved in making the change.

There are, however, two ways of avoiding this. You can bypass the broker and go straight to the Revenue Commissioners stamping branch. If you present it with a completed stock transfer form it will transfer the shares for a fee of £10 per transaction that is for each stock in which you wish to transfer shares. That is less costly than any broker I am aware of. Most of them make a minimum charge of about £40.

Alternatively, you can try contacting the registrar's office of the company in which you hold the stock. Most of them, I understand, will be happy to arrange the transfer for you at no cost whatsoever. They will also advise you on the necessary documentation and provide transfer forms. Who said companies do nothing for their shareholders?

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