Q. We are thinking of purchasing a property in France and would like some advice.  For tax purposes is it better to get the loan in Ireland or in France?  What tax liabilities would we have in Ireland over the years and also when we decide to sell the property again?  Is there somebody that we can get some advice on the matter from?

A. In relation to the loan, it obviously depends on the costs of the loan in both countries.  You will need to contact a number of financial institutions in France to determine what their interest charges are together with any costs for setting up the loan.  As I am sure you are aware, the interest rate in Ireland is relatively low at the moment, therefore this may be the better option if the rates are less than they are in France.

If you rent the property for a number of years, you will be liable to tax in France on the net rental income you receive after taking off allowable deductions.  Assuming you are resident and domiciled of Ireland you will also be liable to Irish income tax on that rental income.  The Double Taxation Agreement between Ireland and France provides for a credit in Ireland to be given for the French tax paid on that income.  Therefore you will effectively be paying tax only in one country.

When you sell the property you will be liable to Capital Gains Tax on the gain you make and this will be applied in both countries.  Unfortunately the Double Taxation Agreement does not cover Capital Gains Tax, therefore you will be liable to the tax in both countries with no credit in Ireland for the French tax paid.

In a column such as this I cannot recommend one advisor over another, however I suggest that you speak to a number of people who may be in this situation and they may be able to refer you to an investment advisor who should be in a position to advise you on this issue.

Q. A number of years ago I sold some property and paid Capital Gains Tax on the money I received.  Out of the proceeds, I invested a sum of money in excess of £20,000 in an insurance policy and put the balance in a bank account.  Is there any need to inform the Revenue Commissioners where the money in the insurance policy came from?

A. As you have paid the Capital Gains Tax on the proceeds of the sale of the property, the investment in the insurance policy is not liable to any additional taxes under the current Life Insurance Investigation.  Therefore you can rest assured that you have no tax liability in relation to this issue and you do not need to inform the Revenue Commissioners.  However they may contact you at some point in the future in order to explain this investment.  I am sure that you will at that point be able to direct them as to the source of the funds.

Q. I invested in a BES Scheme about 5 years ago and got the tax relief on the amount invested.  As the five year period has now elapsed, I assumed that I would be entitled to my money back.  However I am having difficulty in getting any response from the investment people.  Is there anything further that I can do to retrieve my money?

A. Eventhough you made the investment in the BES Scheme 5 years ago, this does not necessarily mean that the money is returned to you on the 5th anniversary.  Generally the money is repaid 5 years after the date the investment is made by the BES fund manager.  Assuming your money was invested in a particular project in March 2001 this means that the earliest you can get that money back is March 2006. Obviously a great deal depends on the options provided in this scheme as all schemes differ i.e. there may be no guarantee that you would get a full (or even a partial) return on your investment.  You should contact your investment manager i.e. the person/institution with whom you invested in the BES Scheme and they should be able to explain exactly what you are likely to get back and when it should come to you.

If you have any queries on money or taxation matters which you would like answered, please send them to "Your Money", c/o Examiner Publications (Cork) Ltd., P.O. Box No. 21, Academy Street, Cork.

Josephine Lane
City Chambers, 4 Lapps Quay, Cork.