Starting this week, Belfast Telegraph Digital's fantastic new Personal Finance Forum, with expert advice from ASM Horwath experts Alan Curry and Keith Storey.

Send your questions to: personalfinance@belfasttelegraph.co.uk. We will answer as many queries as possible but regret we cannot enter into individual correspondence.

Q: Two years ago I left employment with a company which provided me with a good final salary pension, to go to a new job. Naturally, my payments into the first scheme stopped, but I haven’t heard a word from the pension provider. Should I worry about this and what are my options?

EJD, Belfast

Keith Storey: No, I don’t think you should worry - depending on the type of pension scheme, you may not get an annual benefit statement.

If your former scheme was a Defined Benefits Final Salary Scheme, you should have been provided with a statement of pension benefits when you left it. Under this type of scheme, every year you work for the sponsoring employer you accrue a 1/60th or 1/80th of your final salary as a retirement benefit. These types of scheme are provided by large employers, for example the Post Office, British Telecom or the Civil Service.

You should also receive a Summary Funding Statement each year detailing the solvency of the scheme and its ability to meet its obligations to its members.

If you haven’t received one, contact the scheme trustees or the Personnel Office to ensure they have your correct address and ask them to send you a statement.

On the other hand, you may have been a member of a Money Purchase Scheme, Group Personal Pension, or Stakeholder Pension Scheme, into which you and your employer may have made pension contributions. In many cases, these schemes are managed by insurance companies who should be able to send you annual statements detailing the current value of your fund, along with projection of your potential retirement benefits.

Again, ensure the provider has the correct home address for you - and, since many insurers offer online access via their internet sites, why not consider registering to keep up to date with the valuation of your retirement benefits?

All pension scheme benefits, of whatever type, are transferable. However, any decision to transfer should only be taken after consultation with a fully qualified Financial Advisor, who can provide you with a detailed analysis of your current pension benefits and future options, including risks.

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Q: I have been selling a lot of my old clothes and unwanted items on eBay for the past six months. The income from this has helped a great deal towards paying my household bills. However, a friend has told me that I should be paying tax on this income. Is this correct?

GMcG, Carryduff.

Alan Curry: A person who is carrying on a trade with a view to making a profit is considered to be self employed by HM Revenue & Customs (HMRC) and should pay income tax and national insurance on their trading profits. The following are indicators of whether a person is carrying on a trade with a view to a profit:

• goods are purchased with a view to selling at a profit;

• goods are made with a view to selling at a profit;

• goods are sold on behalf of a third party in return for a commission; or

• a service is sold.

In recent years, there has been a dramatic increase in the use of online auction websites such as eBay. Some sellers on eBay would clearly fall into the categories above and should therefore be registered as self employed with HMRC for tax purposes.

However, the majority of sellers on eBay are individuals who are selling off unwanted items that they already own. It is unlikely that HMRC would consider these individuals to be carrying on a trade and seek to tax them on any profits made. This is distinct from items purchased with the intention of selling on at a profit.

If you are unsure of your individual position, you should seek professional advice. It is worth noting that HMRC use computer software programmes to scan websites such as eBay to identify sellers who are making multiple transactions and who are therefore likely to be carrying on a trade.

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Q: My mother died last May and there is inheritance tax to pay on her estate. We have had to sell the family home and her shares to pay this, but the house and shares are worth much less now than when she died. Can we get a tax rebate for this?

CH, Bangor

Alan Curry: The value of an asset included in an estate at death is usually the value immediately before death and is based on the amount the asset could reasonably be expected to fetch if sold on the open market. This is referred to as the probate value and it is this value upon which inheritance tax is calculated.

Due to the current economic climate, both property prices and share prices may have fallen between the date of death and the date of sale of the asset. Where an estate includes quoted securities and they are sold within 12 months of death for less than their probate value, the total sales proceeds before expenses (e.g. commission and stamp duty) may be substituted for the probate value.

If the estate includes land or property that is sold within four years of death then, subject to certain restrictions, a claim may be made for the total sale proceeds before expenses to be substituted for the probate value, thus reducing the inheritance tax bill payable by the executors.

The tax rules relating to valuations of assets and their disposal after death are complex. If you are in any doubt, professional tax advice should always be sought.

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Keith Storey is a Director in ASM Horwath Financial Consultants Ltd. He is experienced in providing advice to both private and corporate clients. His areas of expertise include pre and post retirement planning, developing individual investment strategies, inheritance tax planning, and life and illness protection plans. ASM Horwath Financial Consultants Ltd, 20 Rosemary Street, Belfast BT1 1QD (NI 37083) is a company registered in Northern Ireland and is authorised and regulated by the Financial Services Authority, FSA registered number 193758.

Alan Curry is Director of Tax at ASM Horwath. He is a member of both the Institute of Chartered Accountants in Ireland and the Chartered Institute of Tax and his areas of expertise include tax compliance & planning, employment & personal tax, VAT, trusts & estates, retirement planning, inheritance tax, divorce & separation, and capital taxes planning.

Alan and Keith can be contacted at tel: 028 9024 9222.

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