The small amount of money that has been paid on account to the Revenue Commissioners as part of its inquiries into the Ansbacher deposits is considered by tax experts to be an indication that the persons affected are being less than co-operative.

Up to recently the Revenue had been given £7.6 million (€9.65 million) from 36 individuals or companies. There are understood to be well over 100 cases under scrutiny. The deposits were in existence between 1972 and 1997.

According to sources, the Revenue's inquiries include complex matters to do with the tax bills that arise for the beneficiaries of trusts. These trusts were established in the Channel Islands and the Cayman Islands up to 20 years ago, using funds that had not been declared.

In most cases the beneficiaries are or were the children of the people who established the trusts (the settlors). In one case it is understood a trust was established for a "second family" that an Irish businessman had and that he wanted to provide for.

The level of secrecy that surrounded trusts created within the Ansbacher deposits was such that in some instances the children only learned of the existence of the funds following the death of the settlor.

In a document that has come into the public domain, A Note to John Furze, the level of secrecy involved was outlined. It included the possibility of no documentation whatsoever relating to the trust existing in this jurisdiction, with the settlor being assured that in the event of his or her death, the trustees in the Cayman Islands would inform the beneficiaries of the existence of the trust. It is generally believed that the only reason for the extraordinary level of secrecy was so the Revenue would not discover the existence of the arrangement.

However, in 1997 the McCracken (Dunnes' Payments) Tribunal discovered the Ansbacher deposits and a process began that has led to beneficiaries being identified to the Revenue.

A tax expert, who did not wish to be named, has outlined the implications that arise from this scenario. If the funds used to establish the trust were not declared, according to the source, then a liability exists for the person or company that failed to declare that income, or the estate of the settlor in the case where he or she is deceased. This remains the case even if the person concerned died 20 or more years ago.

The taxes at issue can be income tax, corporation profits tax, VAT or turnover tax. Interest would be applied from the date tax originally became due.

If it were established that the funds were transferred abroad to avoid tax, then any profit that accrued to the trust established with the funds would also create a liability for the settlor. This is the case even though technically the settlor no longer owns the funds.

In some cases the tax law can be complicated if the offshore trust has an associated offshore company, which is known to be the case for some investments made in the Ansbacher deposits' structure. However, if it is established that a tax liability accrued because of gains to the trust, then the settlor faces the issue of not having declared a taxable income.

The tax involved is capital gains tax. The tax due on the funds invested in the trust or the profits that accumulated to the trust become the liability of the settlor or of his or her estate. If the money from the estate has already been distributed, then it becomes the liability of the executor, according to the source.

The matter of when inheritance tax liabilities arise for beneficiaries of discretionary trusts could involve complex legal issues, according to the source, but it is generally the view that the tax arises only from when a payment is made from the trust to a beneficiary or beneficiaries.

Inheritance tax is currently levied at a rate of 20 per cent, but two years ago stood at 40 per cent. The rate that applies depends on the date at which the tax became due. Interest would apply and in cases where a disbursement was received and not declared, the beneficiary, depending on when he or she received the money, could be facing a bill as big or bigger than the amount received.

Beneficiaries are therefore likely to be facing unexpected tax bills as well as potentially significant bills for legal and taxation advice. Another concern they are facing is the issue of whether they will be identified, directly or otherwise, in the report being prepared by the inspectors appointed by the High Court to investigate the Ansbacher deposits.

The source said that in instances such as those involving the Ansbacher deposits, where the Revenue has become aware of hidden funds and the details concerning hidden trusts, it is usually the case that it pursues historical tax bills arising from the funds used to establish the trust, as well as any subsequent capital gains, income tax or inheritance tax bills that arise. "This is especially so since the recent spate of scandals," according to the source.