Questions Of Cash: EasyJet broke my bike; who should pay?

Q. I have just returned from a cycling holiday in Spain's Sierra Nevada mountains. Booking in for the outward easyJet flight, I had to pay an excess baggage charge, in spite of having pre-paid for the bike and my bag weighing 16kg - 4kg less than my baggage limit.

I can't find anything in its terms that warned me, and I was not required to make the payment on the return trip. But on that return flight my bike's frame was crushed, despite being wrapped in more protective cladding than easyJet requires.

Who is liable for the damage - easyJet or my insurer? I have e-mailed easyJet twice and phoned several times, but without response. LC, Blantyre.

A. EasyJet's terms state that paying an extra fee for your bike "increases your checked-in hold baggage allowance (including additional item) to a maximum weight of 32kg". So it was justified in charging you an excess weight charge - your two items combined exceeded the limit by 6kg.

EasyJet accepts that under the Warsaw Convention it was legally liable to pay compensation for damage to your bike, though it denies it did the damage. But it says that under its terms and conditions customers must complete a "PIR [property irregularity] form" at the airport to initiate a claim - which you didn't do.

You might feel that easyJet has not given you very good customer service; so do several other readers who have complained to us. Make sure next time that you read the terms and conditions carefully before you fly.

Q. I believe I was mis-sold an endowment in 1990 by John Chivers & Sons of Birmingham. I have acted on advice provided by the Financial Services Authority, but after two years I cannot even get anyone to consider my complaint.

I have written two letters to John Chivers Ltd, which has taken over the business of John Chivers & Sons, but I have not had a reply. The Financial Ombudsman Service will not consider my complaint, and the Financial Services Compensation Scheme won't consider my claim because it doesn't consider the company to be "in default".

Standard Life, the policy issuer, has not even answered my request for advice and information. CF, Birmingham.

A. John Chivers & Sons ceased trading in 2000 and the firm dissolved. Some of its trading activities were sold to John Chivers Ltd, but not the division responsible for selling you an endowment policy. John Chivers Ltd says it does not know of any letters you sent to it.

We spoke to Martin Giddins, who had been a partner in John Chivers & Sons. He disputes the suggestion that there might have been a mis-sale of an endowment to you, but has agreed to consider your claim.

While Giddins is now retired, if there is any liability for the sales advice, this would be covered by his professional indemnity insurance.

As John Chivers & Sons was not insolvent and there is no suggestion that its former partners were unable to pay their bills, there is no call on the Financial Services Compensation Scheme to meet any liabilities.

Q. I have two properties, both of which I have been living in during the past 18 months. My main residence is worth £150,000 and the other, where I work for part of the week, is worth £70,000. If I sell the second property, will this be subject to capital gains tax?

My bank has said it will not, on the basis that I live in, and pay utility bills for, both properties. Would the situation be different if I sold the more expensive property, or disposed of both at the same time? LD, Neath.

A. The advice you have been given sounds inadequate, and potentially misleading. Leonie Kerswill, a tax partner at accountants PricewaterhouseCoopers, says: "There is no capital gains tax (CGT) on the profit from the sale of a property which is your only or main residence (known as your principal private residence, or PPR).

"But you only get one PPR exemption - so it is not correct to say that both properties will be free from CGT just because you have paid utility bills and have lived in both. However, in your circumstances you may not have to pay CGT on either property. If a property has at some time been your PPR, even if you've moved out and bought somewhere else, the last three years of ownership are treated as if it was your PPR.

"You can either make an election as to which property should be the PPR, or it will be decided as a question of fact. You have two years from the time you first owned more than one property to make the election.

"In your case, it is important that the first property to be sold is treated as your PPR (in which case any gain will be exempt from CGT) and then the second one automatically becomes your PPR.

"Provided you sell it within three years of having bought the property, the entire gain will also qualify for PPR relief. If you owned it for longer than three years, then you do a simple apportionment calculation so that at least some of the gain will be free of CGT. You also have an annual exemption from CGT, which is currently £8,800."