A tax loophole that could have been used for "major tax avoidance" was closed yesterday by the Minister for Finance, Mr McCreevy. The loophole was discovered before it had been used, according to the Minister's spokeswoman. Yesterday's move will make "reverse premiums" taxable as income for recipients.

Reverse premiums are payments or other benefits provided by a property developer or landlord to a prospective tenant as an inducement to enter into a lease agreement at a rent above the market rate.

According to the Department, up to yesterday it was possible that the payer of the premium could get tax relief on the payment, while the recipient could get the premium tax free. Reverse premiums received from yesterday must be treated as taxable revenue rather than a capital receipt.