Revenue nabs 190 Irish residents for hidden offshore assets

Almost 200 Irish residents who failed to avail of a window to disclose offshore assets have since been caught by Revenue.

The 190 taxpayers are just the first group in an ongoing investigation by tax authorities of money, property and other assets that had been hidden from Irish Revenue.

The hunt for offshore tax evaders was announced last November, six months after a deadline for people to admit they had undeclared income offshore passed.

That voluntary disclosure window, announced by then minister for finance Michael Noonan in the 2017 budget, had seen close to 3,000 people come forward with details of assets held abroad on which tax should have been paid.

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These included foreign earnings and income from rental of property abroad, including holiday homes. It also involved money held in foreign bank accounts and even pensions, including state pensions, being paid to Irish residents who may have worked abroad for some of their careers.

“Revenue has concluded approximately 190 interventions into cases involving previously undisclosed offshore assets, yielding in the region of €1.2 million in tax, interest and penalties,” a spokeswoman said.

She said data received under new international arrangements for the automatic exchange of information between countries had been used to “identify and pursue those who have attempted to use offshore accounts, structures or assets to evade or avoid their tax obligations”.

Revenue matches the new data against its own taxpayer records and cross-checks it against prior tax returns “to determine whether all relevant income and assets have been fully and properly declared”.

Defaulters’ list

Revenue had warned that anyone caught with undeclared offshore assets after the May deadline would not be able to avail of voluntary disclosure arrangements, even if they approached Revenue proactively. Voluntary disclosure involves reduced financial penalties (3-10 per cent of liability as opposed to up to 100 per cent after this date) and protection from publication in the quarterly defaulters’ list.

Revenue has collected €87.5 million from 2,828 taxpayers who did avail of the amnesty – well ahead of the original €30 million forecast. Interest (€25.8 million) and penalties (€5.6 million) made up more than a third of all payments collected, with the actual tax outstanding being about €56.2 million.

Efforts are still continuing to conclude the last of the cases that emerged under voluntary disclosure, but the sums involved are unlikely to rise much further.

A statistical breakdown provided by Revenue shows that nine disclosures involved sums of €1 million or more. But most were valued at €20,000 or less (78.4 per cent).

Property, shares, bank accounts and pensions cover most of the disclosures made, but in terms of value, property, earned income, shares and trusts accounted for the greatest.

Some 817 taxpayers, or 29 per cent of all disclosures, made a settlement related to a property held overseas on which tax was owed. The total liability related to property stood at €17.4 million, or an average amount owed of €21,297.

Foreign shares

Foreign-held shares was the second most frequent disclosure, at 567, or 20 per cent of the total. Some €9.9 million in liabilities arose on this asset, while foreign bank accounts were made known by 486 taxpayers, with a total liability of €8.9 million. This indicates that the average liability was €18,312.

According to the Revenue data, Irish residents hold assets across a wide range of jurisdictions. By number, the biggest location is the UK, accounting for 1,200 or 42 per cent of previously undeclared disclosures – one-fifth of them relating to pensions. In the US, which accounted for 14 per cent of disclosures, four in 10 related to listed company shares.

But by value, both Switzerland and the Isle of Man hold more than a quarter of the value of all disclosures, with a significant proportion of earned income issues arising in Switzerland, and trust and bank account disclosures in the Isle of Man.

Jersey and Malta are dominated by trust disclosures, which make up more than half of the value of disclosures in these jurisdictions. Other, smaller locations, such as the British Virgin Islands, also make the list, with almost €3 million in disclosures – more than France, Germany or Malta.

All of the BVI disclosures relate to property. Australia, France, Portugal and Spain are also dominated by property disclosures.