Loopholes: Mr Cowen has availed of the Finance Bill to close a couple of loopholes relating to pension schemes.

The Minister has introduced measures to trigger tax charges on investments by Small Self-Administered Schemes - generally one-person schemes operated by the self-employed - if certain investment restrictions are breached.

If such schemes invest in items such as holiday homes, the value of those assets will now be considered a taxable pension payment.

The measure is designed to render such investment tax inefficient.

An element of the 2003 legislation in relation to Approved Retirement Funds (ARFs) that allows people to invest their pension funds in commercial property that they use in relation to business has also been closed off by yesterday's Finance Bill.

The 2003 Finance Act introduced restrictions on investment options by ARFs - such as property used as a residence or a holiday home.

The list has now been expanded to include commercial property used by the retirement fund holder or related people.

Following the enactment of the Bill, such investments will still be permitted but they will be considered as "distributions" or drawdowns from the ARF and, as such, they will be liable to income tax at the retirement fund holder's marginal rate.