Tax Dodging By Wealthy 'Unacceptable' Says Labour TD

A Labour TD has criticised the exploitation of complex tax exile schemes by Ireland's wealthy.

The comments from Labour's spokeswoman on finance, Joan Burton, were made after it emerged a businessman who was appointed to become chairman of the Dublin Docklands Development Authority took advantage of a loophole to legally reduce his tax liability when he sold his building company.

Gerry McCaughey's Century Homes was acquired by building materials group Kingspan for €67m in 2005.

It since emerged Mr McCaughey and three other shareholders were advised that they could benefit from not paying 20% capital gains tax on the transaction if their spouses lived in Italy for a year.

Ms Burton said she would like to know if Minister Gormley, who appointed the ex-Century Homes owner, was aware of the tax avoidance scheme before he made the appointment or if he made any inquiry of Mr McCaughey about his tax status.

Under the scheme shareholders sold their shares to their wives who would then sell them to a third-party. A document from an investment company outlining the plan said: "We would prefer to minimise dissemination of knowledge of the matters contained in this report as Revenue attack is more likely if this route was to be copied by others."

The Labour minister said it was a matter of fair play and equity.

"It is simply not acceptable that a small and select group of some of the wealthiest people in the country can use complex but routine tax exile schemes to avoid paying their fair share of the tax burden", she said.

Ms Burton added that if the government is going to ask ordinary taxpayers to take an additional tax hit in the budget on April 7th, the minimum they should expect is that schemes to facilitate tax avoidance by the wealthy are ended.

(DW/JM)