REVENUE CLAMPDOWN:THE OWNERS of property abroad are facing fresh Revenue scrutiny on whether any Irish tax is due on such assets following a legal manoeuvre by the Government that will make it easier to secure information from estate agents on foreign transactions.
The move - contained in the Finance Bill, which gives effect to the Budget - follows an unsuccessful attempt by the Revenue Commissioners to inspect records held in the Dublin offices of Savills HOK. Revenue dropped its demand for information last April on the same day as Savills HOK withdrew a High Court challenge to the request.
Citing a legal challenge to an attempt by Revenue to obtain data on offshore property markets from estate agents who claimed privilege, Mr Lenihan is introducing a change in the tax code that will restrictively define the term "profession".
As a result of this change, the provisions on professional confidentiality "may only be relied upon in the situations for which it was originally intended, being information concerning doctor/patient confidentiality and solicitor/client privilege".
Such a change, once signed into law, will help the tax authorities to widen the scope of their examination of assets held offshore.
Revenue's objective in such inquiries is to examine whether property was acquired using "hot" money, ie undeclared income on which tax should have been paid.
Having used information held by banks to investigate bogus non-resident accounts, Revenue first approached 50 estate agents with a demand to examine their files in May 2003.
In an Irish Times interview earlier this year, Revenue chairwoman Josephine Feehily said the organisation's next target after the bogus accounts and offshore assets investigations was overseas property. "If we could get access to a large body of information about foreign properties sold here to Irish residents, that might give us the wherewithal for a further investigation," she said at the time.
The Irish Auctioneers' and Valuers' Institute has said previously it would have no problem advising members to co-operate with requests for information from Revenue, but not until its members are protected by law from the risk of being sued by clients.
In July 2007, Revenue's offshore assets division sent letters to a sample of people in a bid to track down tax owed on foreign property. The project was carried out using information obtained under an EU savings directive, effective since July 2005, which enables tax authorities to share information about foreign nationals who have interest-earning bank accounts.
Working on the assumption that anyone with an interest-earning account in another country owned property there, Revenue wanted more information on such holdings.
