All your personal finance questions answered.

Gresham Hotels

I have a number of shares in Gresham and am aware that there has been a takeover of the company. I have not heard anything from the company and want to know what to do with the shares. Can I hold on to them under the new owners? If not, how do I go about selling them?

Mr O.P., Dublin

As you say, Gresham does have new owners. The offer from a group of investors in the Precinct consortium went "wholly unconditional" on July 8th.

That means the prospective buyers have won the support of the holders of more than 80 per cent of the shares in Gresham for their offer. Once the offer goes unconditional, the bidders have the right to buy the remaining shares whether the existing shareholders want to sell or not.

Whether the existing shareholders have the option to hold on to their shares depends on the terms of the offer. In this case, the offer is in cash. What that means for you is that you have no choice but to sell your shares in the hotel group for the improved offer of € 1.40 that was accepted by the major shareholders. There is no provision in the offer for people to retain their holdings under the new management.

So what now? Well, in fact the deadline for accepting the Gresham offer passed yesterday. As a result, the new owners will now petition the High Court for an order to compulsorily acquire the remaining shares.

In formal terms, that means that the shares will be frozen, worthless to you, and can be redeemed only by returning them to the company's registrar. The company's listing on the Irish Stock Exchange is scheduled to disappear at the close of business on August 9th.

The value of the shares, at the 1.40 offer price, will be held on account for the holders of those shares not tendered before the official acceptance date.

In practical terms, there is still no problem with accepting the offer. The only impact of the passing of the official acceptance date is that subsequent acceptances will go to the back of the queue and receive payments only after those shares received by the acceptance date have been processed - August 4th. In reality, you are only talking about a matter of days in the difference.

If you hold your shares in certificate form and have not received a form of acceptance from Gresham's registrars, Computershare Investor Services (Ireland), you should contact them. Their address is Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, or online at www.computershare.ie, or call them on 01 2163100.

You should have received this form but it may have gone astray if you moved address since the shares were bought and registered.

You can also contact the registrar if you have any queries regarding the filling out of the form. People holding their shares in electronic form can transfer the shares electronically through their CREST sponsor or nominee account manager.

Mortgage

I am considering changing to the First Active Current Account mortgage. Am I correct in thinking that even if I don't make any additional payments or have any excess funds in my current account by month's end that I should still be ahead because any money sitting in the current account for any period of the month will reduce the loan sum by the amount in the current account?

Mr B.McG., Galway

That seems to be the major selling point of this product. Mortgages are becoming more competitive all the time and that is likely to continue as lenders see a levelling off in the highly profitable mortgage market.

As long as there are funds in the account - i.e. you are not overdrawn - you will be paying less interest on your mortgage. However, the real gains emerge when you are the sort who spends less than their net monthly income.

Working the figures on a mortgage of € 200,000 at the current First Active rate of 3.29 per cent over 30 years and a net monthly income of € 1,500, and assuming that you do not have any excess funds sitting in your account at the end of the month, you would save € 1,216.11 in interest over the 30 years and pay off your mortgage just two months early.

That is not a lot to write home about. Bear in mind first that First Active is not renowned for producing the cheapest mortgage rates in the market.

A more competitive rate could well deliver better results than a €1,200 saving over 30 years.

You also need to weigh up the differences in charging structure between First Active and your current bank, or indeed other providers on the market and, indeed, the relationship you have with your bank.

Stamp duty

I purchased a new apartment in March 2001 and received a first-time buyer's grant and exemption from stamp duty. I intend travelling abroad for six months and renting my apartment. I shall be resident in the apartment with my tenant for one month prior to departure.

Will I be putting the stamp duty exemption at risk by renting my apartment while not living in the apartment?

Mr A.M., Dublin

It sounds as if you might be putting yourself at risk of a stamp duty clawback. The rules grant exemption from stamp duty to all owner-occupiers of newly-built homes as long as they fall within certain size requirements.

There are two key determinants in the scheme: you must be an owner-occupier and the property must be your main home (principal private residence) for five years from the date of purchase, and you cannot get income from rent over and above the limits allowed in the rent-a-room scheme.

You are clearly an owner-occupier and I cannot see how you would lose that status by virtue of a six-month trip abroad. The issue of rent is more complicated. The rent-a-room scheme is designed to allow income tax relief on rental income up to 7,500. A cent over this and you are liable for income tax on all the rent.

There are two issues:

will the rental income exceed € 7,500 in any tax year?

will the Revenue accept that the rent-a-room scheme applies when you are not physically there for six months?

If the rental period straddles two tax years, you might be under the threshold. On the second point, it is a judgment call.

I imagine that, if the figures work, you might edge it. I find in these cases that if you ask the Revenue they will opt for the cautious interpretation.

If the figure is too high to qualify, you will face a clawback. In such a case, you would be liable for the full stamp-duty rate applicable at the time the property was purchased on the value of the property at that time.

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.