Inheritance tax loophole used by wealthy to be closed off

So it seems that the Department of Finance has bowed to growing public pressure and made moves to close off the inheritance tax loophole that was being abused by the wealthy.

In today’s Irish Independent, Charlie Weston has reported the loophole will be shut but we await some of the finer detail of how exactly this will work.

This is an enormous victory for Freedom of Information legislation.

This loophole has been rampantly abused for close to a decade with both the Department of Finance and Revenue Commissioners aware of cases where wealthy individuals were handing over properties sometimes worth well in excess of €1 million to their sons and daughters entirely tax-free.

It got kicked to touch in last year’s budget discussions as first revealed in the Sunday Times. You can read about it here and here and the warnings from an industry whistleblower that abuse of it was “taking off”.

And it looked like the same thing was going to happen this year when the Sunday Business Post reported that it had been put on the “back-burner” in the immediate aftermath of Budget 2017.

Now it looks like there has been a change of heart. Thanks to TDs Joan Collins, Joan Burton and Tommy Broughan for raising this issue in the Dáil.

Others including Labour’s Alan Kelly were also planning to query why nothing was being done and clearly putting it on the “back-burner” was no longer an option.

It will be important to keep a close eye on how exactly the change is made, whether there is any delay, and if the loophole has been entirely shut.

One thing we know for certain is that the wealthy and their tax advisers will also be studying this closely to see if the door has been fully closed on it.

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