irish life - right or wrong

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eamonn66

Registered User
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what do people think of the irish life decision to not cooperate with the latest revenue exercise. personally i think they are dead right and it is a discrace that revenue are now chasing these people after so long. how convenient that this has only now come to light after so many years, giving plenty of time for penalties and interest to accumulate. The people affected are probably at or nearing retirement and im sure many, including honest taxpayers will have great difficulty in showing where they got their money from 20 years ago, a time before cumputer records. either the revenue had their heads up their backsides for many years or it was a calculated decision to put this on the long finger to maximise eventual return. either way, they missed the boat and politicians should step in and stop them or else where will it stop.

before anyone starts accusing me of anything, neither i nor any of my family or friends that i know of have any hot money or will be affected by this or any other of their schemes. i just dont think it is right or fair.
 
I agree with you Eamonn. I think that if Revenue really need IL to co-operate, they can get a court order to do so. I just wonder are IL brave or stupid? i.e. Will the Revenue hold this against them in the long run?

From ILs point of view, how do you think it would look to their customers if they receive a letter on IL headed paper saying that you have to account for money you invested 5 years ago? I think most of them would think 'feckin company' rather than 'blame' the Revenue.

Of course, I'm not saying that those who evaded tax should be let off the hook. I disagree on the whole notion that people will have difficulty in remembering/dislcosing where they got their money from. The Revenue have set the threshold for this exercise at €20k(IR£15.75k), so I think that most 'honest' people should have no difficulty in accounting for this money.

Like yourself, neither I nor my family/connected persons have nothing to fear from this investigation (unfortunately none of us had €20k or more to invest at any time in the past!!!).
 
Irish Life are wrong. In the long run it's in the best interest of all financial institutions (and all individuals, for that matter) to eradicate the culture of tax evasion that, like it or not, has existed in Ireland for a long time.

The argument about difficulty in "remembering" where the money came from is weak in the extreme.
 
Hi

I think there are a couple of points here, which deserve different responses:

A) Are Irish Life & Permanent right or wrong ?
They have been asked to write to their clients and advise them that they may have a tax liability, based upon their holding of a certain type of life policy etc. The fact that IL&P have said No, they will not write at their company's expense, is the right decision imho. Why should they carry the cost of notifying Joe Public ?

B) Are Irish Life & Permanent helping tax dodgers ?
I doubt it, the policies were sold in good faith Im sure (though we may later see evidence to suggest otherwise), it's up to the individuals to prove to the tax people that the money was good, not IL&P

C) Is it good policy for IL&P to help eradicate the culture of tax evasion ?
Yes, certainly, they can do it by more stringent following of current legislation, advice on their website etc but it's not up to them to police the population of Ireland for good conduct relating to tax returns etc

Cheers

G>
 
I take the 'good faith' arguement with a pinch of salt. We've seen how the banking industry was very quick to help their customers to evade tax, even if this were done at an unofficial individual level. Irish Life and other providers got the profit from these policies and now have an obligation to ensure that this substantial tax evasion issue is addressed.

I appreciate their practical problem in that these records are probably not available on computer today, but the overall cost of producing these letters would be a drop in the ocean for Irish Life.
 
It is certainly wrong for revenue to assume the industry will embrace the cost and effort involved in such an investigation. Surely such cooperation supports an inference of gulity knowledge?


Sumatra
 
Sumatra said:
Surely such cooperation supports an inference of gulity knowledge?
Sumatra
Click to expand...
So you reckon that IL had no knowledge that these policies were being used for hot money by a fair chunk of their customers?
 
Should a restaurateur treat patrons who settle in cash with suspicion? How about a travel agent accepting a cash payment for a family holiday? Where is the even hand?

In future perhaps financial institutions will have to go one step further. Not only will they have to identify the investors but they will have also have to satisfy themselves that the investment proposed is indeed from a legitimate tax paid source. Correct?
 
I note you didn't answer the question Sumatra - Do you reckon that IL had no knowledge that these policies were being used for hot money by a fair chunk of their customers?
 
Why did An Post jump on the bandwagon and describe their Savings Certs as "confidential"? Confidential from whom?

Isn't it ironic that the safest place for hot money may turn out to be an organ of the State as the political ramifications of Revenue accusing An Post probably ensures that the latter will be a protected species.
 
How would a financial institution be expcted to know if:

(a) an individual who sold an investment property had paid CGT on the gain?

(b) a shopkeeper making their weekly lodgement had paid over all VAT owing on last weeks cash sales?

These are similar to some of the examples given of where liabilities may arise for policyholders in yesterdays SBP. If someone went to an insurance co with €20k and said that the money was from the proceeds of a property sale, was the insurance company under any obligation to ask if the CGT was paid? I don't think so. If, on the other hand, the money was received in the form of a cheque drawn on an Isle of Man account, that could be a different matter.
 
Rainyday, I'm not aware that any of these savings products were promoted as a safe haven for hot money? Everyone has a responsibility to pay their own correct tax and we shouldn't be trying to dilute this responsibility when things go wrong for them. Its they who should pay for the costs of the investigation not legitimate investors.
 
I'm with Rainy on the issue of it being right to expect the industry to bear some of the costs if it can be shown that the investment companies deliberately facilitated laundering hot money.

I have little doubt that's exactly what happened. However, since the Revenue haven't yet produced evidence to this effect it has enabled IL to act the wounded innocent.

I would imagine the Revenue expected the industry to roll over and co-operate without question on this one, particularly given the mauling (albeit limited sanction) it took over non-resident accounts and DIRT.

I suspect they now wish they'd collected some evidence with which to brief the press off the record as opposed to the inconclusive stories put out over the last couple of days that the Revenue are convinced there's a smoking gun somewhere.

In any event this one is sure to run and run - the Revenue will feel the need to teach IL and any other like-minded upstarts a big lesson.

It'll be bloody - and I'm beginning to feel vaguely reassured that being a compliant taxpayer over all those years might not have been the really dumb move it always looked to be.
 
There is an obligation on all financial institutions / intermediaries to identify their client before accepting an investment would Oysterman and Clubman like to see this going one step further in that they should also have to satisfy themselves that tax has been paid on the proposed investment. If the investor pays by cheque / draft then is it safe to assume the issuing bank would be responsible. I wouldn't imagine many of the investments were made in 'crisp notes'.
 
Sumatra said:
Rainyday, I'm not aware that any of these savings products were promoted as a safe haven for hot money? Everyone has a responsibility to pay their own correct tax and we shouldn't be trying to dilute this responsibility when things go wrong for them. Its they who should pay for the costs of the investigation not legitimate investors.
Click to expand...
I note you've avoided the question a 2nd time - Have you ever considered a career in politics? I'll try again - Do you reckon that IL had no knowledge that these policies were being used for hot money by a fair chunk of their customers?
 
Hey Rainyday

Why does it matter so much, what Sumatra thinks about this ?
- I would have thought each person was entitled to a little privacy on this forum, are they not ?

Regards

G>
 
Harchibald
Isn't it ironic that the safest place for hot money may turn out to be an organ of the State as the political ramifications of Revenue accusing An Post probably ensures that the latter will be a protected species
Click to expand...
Could there be any truth in the suggestion that a lot of "hot money" goes into Prize Bonds? That would explain why so few ordinary punters ever win.

;)
 
A brief history lesson.

Whilst there are now lots of regulation in relation to Money Laundering, carrying out client factfind, not accepting cash etc, this Revenue investigation goes back some 25 years. What were the rules in 1980?
There were no requirements in relation to factfinds, asking clients where the money came from, getting Money Laundering clearance, carrying out a factfind etc. A client could walk into any institution or broker and simply invest the money into a Bond by completing a simple proposal form. There was no requirement to ask questions, even if one had suspicions. A client's tax affairs was between him/her and the Revenue.

The problem now is that institutions, brokers etc are being judged on what happened 25 years ago using todays standards. And the Revenue want the industry to do their work for them, when they obviously failed to manage the situation.

And remember in 1980 Irish Life, ACC, ICC, An Post, Prize Bonds etc were all state owned. So why should todays shareholders in Irish Life (for example) pay for the State's mismanagement in the past?

Conan
 
Conan said:
in 1980 Irish Life, ACC, ICC, An Post, Prize Bonds etc were all state owned. So why should todays shareholders in Irish Life (for example) pay for the State's mismanagement in the past?
Click to expand...

Yes, the fact that IL was state owned is the greatest irony in all this, isn't it? Should today's shareholders pay - that's an interesting one. I suppose if these costs depress the share price you could say that this should have been built into the share price at the time of flotation, i.e. the distinct possibility that there might be some skeletons in the closet relating to the past.
 
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