The A to B guide to selling shares

READERS' LIVES; Confused by the Halifax ... tax rebates for the self employed ... lost pensions . Your financial queries answered

I am due to receive free Halifax shares and have been sent various forms to fill in. But I'm still not clear precisely what the different options mean. Can you clarify?

DB, Cambridge

It has to be said that the Halifax free share forms are confusing. There are several points.

First, try and return the appropriate form by 26 May. You won't, however, lose the shares if you miss the deadline. You can still claim your free shares within three years. But you do have to claim them. They won't be sent automatically.

Next, do you want to sell the shares straightaway? If so, you could return form B "Selling Your Shares". But use this form only if you want the Halifax to sell your shares free of charge on the first day of dealing, 2 June. Your shares will be sold on the first day so long as they fetch at least pounds 4.15 a share. If this floor price is not met, your shares will not be sold - even if the price subsequently goes above this level. Instead, the Halifax will write to you for further instructions.

But do you want the Halifax to sell your shares? Alliance & Leicester shareholders who got that society to sell the shares straight away lost out on the subsequent rise in the shares' value. They could have sold the shares a day or two later themselves and, even after taking account of stockbrokers' charges, would have been much better off. (Of course, the shares could fall in value after the start of trading.)

So, if you want to sell the shares yourself, ignore Form B and instead fill out form A "Keeping Your Shares". But make sure you fill out the form correctly. You must sign both sides of form A to get hold of the share certificate. You will need the share certificate if you want to sell the shares yourself, or if you want to transfer them to a PEP (other than the Halifax's own PEP) or if you simply want to keep the shares and hold the share certificate.

Alternatively, you can keep the shares but hold them in the Halifax Shareholder Account. In this case, you should sign only the first page of form A. You won't then be sent the share certificate, but will receive a statement of your shareholding. When you eventually sell the shares, they will be sold through the Halifax share dealing service.

One other point. Free shares you get count as newly issued shares and you can transfer them directly into a PEP within 42 days. But you can also buy more Halifax shares on top of your free shares. These will be bought for you on the Stock Market. They will count as "second-hand" shares rather than newly issued shares and you cannot transfer them directly into a PEP. If you want to buy more shares and put them in a PEP, you'll need to set up your PEP first.

There is a likelihood that I will be made redundant, in which case I would consider setting up as a self-employed consultant. However, after working for many years, I would be more than happy to take things easy for a while. I understand that if I become self-employed and make a loss from my new work, I would be allowed to reclaim some of the tax I have paid through my current job. Can you confirm the position?

VM, London

In principle, you are right. There are various ways a self-employed person can set off losses. One way is available only if you make a loss during any of the first four tax years in which you trade. If you make a loss in any of the first four years you can get tax relief on any income in the three years before the year in which the loss was made. So you could get a rebate of the tax you have paid through your job.

But tread carefully. You would make a loss if income from your self-employed work comes to less than the capital allowances you can claim (for buying a computer system to set up your business, for example) together with your allowable business expenses. It may be that the type of consultancy work you are considering requires relatively little outlay. So any losses you do make could be relatively small and the amount of tax you could reclaim could be small.

More significantly, you would be able to claim the loss only if you were working on a commercial basis and had a reasonable expectation of making a profit. In other words, you cannot use the system simply to take a sabbatical which is subsidised by rebates of tax from earlier years.

As a precaution, discuss your business plans with a competent accountant and get advice on how best legitimately to take advantage of the tax rules.

Some time ago you published the number of an agency which helps trace pension entitlements from years gone by. Can you give it again?

DS, Lancashire

You want to contact the government-run Pension Schemes Registry, PO Box 1NN, Newcastle-Upon-Tyne, NE99 1NN; or call 0191 225 6393.