Can I afford to quit work for our children?
Published 27/07/2014 | 02:30
My husband and I have three young children. We both work full-time - however, our childcare costs work out the same as my take-home pay over the year. We work long hours and feel our children would be happier if one of us were at home.
Can I afford to give up work- and would doing so damage my long-term financial future?
Niamh, Donabate, Co Dublin
Eoin McGee replies: You ask two key questions here: can you afford it and secondly, will it damage your long-term future? The answer to both questions is yes.
In the short term, given you are already paying all of your take-home pay on childcare costs, this means it is actually costing you money to work once you add in travel, lunches and other work-related expenses.
But remember, as the kids get older, the childcare costs decrease and it may become more manageable.
You need to consider if you will be able to return to the workforce in a few years at the same level if one of you gives up now. You also need to consider other benefits such as pensions and perks your current employment may offer you.
Ultimately, you mention in the question that you feel the children would be happier if one of you were at home. Therein lies your answer.
Have I lost out on Vodafone shares?
I have just returned to Ireland after working abroad for a year. I hold Vodafone shares - but never received any correspondence about the payout under the Vodafone/Verizon deal earlier this year. Have I lost out?
Douglas, Clontarf, Dublin 3
Eoin McGee replies:The good news is you have not lost out; the bad news is your payout is now subject to tax, which was avoidable.
When Vodafone wrote to its shareholders earlier in the year there were several questions to be answered in relation to the deal. First, were you happy to sell the American operation of Vodafone to Verizon? Second, Verizon were buying the operation by giving some cash and some shares. So did you want to sell or keep the Verizon shares you were given? And how did you want the "cash" payout to be treated - as a capital or income payment?
The default was you would keep the free Verizon shares and the payment would be subject to income tax. So this is what would have happened to you.
This means you are now left with some Vodafone and Verizon shares. The cash payment would have been lodged automatically to the same bank account your dividends are paid into.
As the default was the payment that would be treated as income, you will be required to submit a tax return in relation to this payment and pay the appropriate tax. The payment will be subject to income tax, PRSI and USC so could cost you about 50pc of the payment.
Those who had Vodafone shares because they were originally eircom shareholders and opted to have the payment treated as capital avoided paying any tax at all on this payout.
What's more worrying is you said that you never received any correspondence; this may mean that your current address is not registered correctly. You need to contact Computershare (www.computershare.ie). It holds the register of Vodafone shareholders and will be able to track down your shares for you and resolve any issues regarding future correspondence.
- Eoin McGee is principal of the Kildare financial advisers, Prosperous Financial Planning
Sunday Indo Business