Tuesday, 18 May 2010

TDs’ pension “gifts” can be written off against tax

It’s never nice when your holidays are drawing to an end and you’re in the last week. I suppose the only consolation is you’re not compelled to buy the Sindo anymore, if you’re in the habit of getting a paper on a Sunday. That’s the only thing you can get in this part of Spain.

I got it again in an attempt to keep abreast of goings-on in dear old Erin, but I have to say - having read the thing cover to cover - I’m none the wiser. It looks as though an editorial directive was issued by Tony O’Reilly to talk up economic recovery, with hacks and columnists (with the exception of the excellent Gene Kerrigan) spinning out dizzying statistics to convince us that Ireland is out of recession and is going to be the envy of the world once more. Mind you, GDP figures can be misleading when you are host to as many tax-dodging multinationals as we are.

Indeed, I’m half expecting to see the skyline punctured by busy cranes whizzing about like something out of War of the Worlds when I get back, and to learn that Nama is a distant memory that everyone laughs about as they rush off, in their loan-financed ‘10 Mercs, to snap up yet another investment property.

So when I found myself reading that politicians who “gifted” their pensions to the State were to get the total amount back in tax credits, I didn’t know what to believe. But, in an Irish context, that seems far more likely than the economy-as-Lazarus guff.

It seems that due to “legal difficulties” the only way serving TDs could relinquish their multiple pensions, which they receive even as they are working, was by making a gift of them to the State. Funny how the phrases “legal difficulties” and “it would be unconstitutional” are always invoked when the privileged are challenged in some way, isn’t it? Another example being when judges were asked to take a pay cut.

According to the paper’s chief reporter, Daniel McConnell, the Revenue Commissioner says that “any person who gifts money to the Minister for Finance and the State will have that amount written down against their income tax liability.” So TDs who have supposedly relinquished their pensions will be none the worse off, and the exchequer will be none the better off? What??

If that is true, it sounds too incredible even for Ireland.

Can’t wait to get back.

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Anonymous said...

The recession is over? I suppose the cut in the old age pension is off the agenda then? Not to mention anything else they were palnning!! Oooh I hope so!!! Oh and GM, Seaneen and Drumm et al will be soo happy with the news, I'd say there cracking open the cocktail cabinet right about now.

GM on that tax loophole thing? Tax credits to retrive an extra pension(s)?? I'm gob smacked! Surely not?


Lump Sum Annuity said...

yeah!! its true ...pension cut is really paining...Lump Sum Annuity

anna said...

Can't be said often enough- we have a rotten tax system that Amply Rewards, in fact Even Encourages the rich to Evade tax- never stops trying to find ingenious ways to help them do it.
In Ship of Fools, F'OT devotes some short but illuminating chapters to this: he mentions a developer who set up around the 70's- but somehow never got round to filing tax returns for his company/ companies till 18 yrs later. In those yrs he built 30 major developments- seemingly as F O 'T notes with Ghosts as labour- because he never filed returns for employee PRSI, employee tax etc.
In fact the Ghost Gang Master had so little earnings (declared!) that he himself paid no tax. Quite right too – poor man's earnings were very low.
So when he sold his D4 mansion – in the boom yrs for untold millions - he paid NO capital gains tax on it- as his income was no low he fell below the tax paying threshold .
Basically the Revenue doesn't bother getting after these crooks who laugh at us fools working to further their greed.
And people think Ireland does so well in the lack of corruption/ Transparency stakes?
Of course it does- with sloppy/non existent detective work by Revenue OF Course so many of our rich people and companies come up smelling of Roses.
I read a book on Irelands scandals, possibly Gene Kerrigan 10 yrs ago. In 1 chapter on Ireland's companies he mentioned that only ONE Irish company director was charged with fraud Ever since the creation of the state. I doubt if that stat went up much in the last 10 yrs either.
In 1997 I met someone in Belfast whose friend owed a small local chippy in a small town in west region of NI. Mr Chippy decided to quietly leave a few £1000 off his returns to the Revenue (That's HM Tax Dept in NI/UK).
Mr Local Chippy got a friendly letter from the Tax Dept:
"We don't want to alarm you but our business analysis dept shows that your chippy is showing a sudden drop in revenue to 40% below that of similar enterprises in similar size towns in your region. By the way this is JUST a friendly HELLO from concerned friends at HM Tax!!*"
* But with a subtle hint that they might not be so friendly if his declared income didn't go UP. Now how is it the Revenue here didn't issue any similar letters to Mr Big Chippy the Dublin developer in 18 yrs- let alone ask him for a few million bob?

The Gombeen Man said...

@ Dakota. Has there been anything else on it, D, or was it only the Sindo? It sounds incredible, even for Ireland, as I say.

@ Anna. Sorry - due to wi-fi unavailability for the past couple of days, I am only getting round to responding to your comments on one of the posts. I hope you're feeling better?

Anonymous said...

Good to see you back GM. Em I haven't seen anything yet about it. I didn't read the article in the Sindo. Seems bizzare to me even for Ireland.


The Gombeen Man said...

It does, doesn't it, D? In Cherbourg at the 'mo, with the laptop out (wi-fi: hooray!!) and a Quik toastie burger. None of that frogs' legs stuff for me!

Can't say I'm waiting to kiss the ground of dear old Erin upon disembarkation ;-)