Payments raise the possibility of substantial outstanding bill for tax

THE Revenue Commissioners are understood to be taking an active interest in the evidence being presented at the tribunal.

THE Revenue Commissioners are understood to be taking an active interest in the evidence being presented at the tribunal.

They will be keen to look at the tax status of money paid into the Ansbascher deposits - accounts held at Guinness & Mahon in Dublin in the name of the Cayman Islands bank. These Ansbascher deposits were moved between 1988 and 1991 to another bank in Dublin - Irish Intercontinental Bank.

The tribunal was told that Mr Charles Haughey was one of the beneficiaries of these accounts and it may want to examine the tax status of these payments. However, the tribunal also heard that a number of others also held money in the same accounts where up to Pounds 30-Pounds 40 million may have been lodged at any one time.

In Mr Haughey's case, the tribunal established that some of his living expenses were paid out of the accounts. The money was paid by the late Mr Des Traynor to Mr Haughey's accountants.

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While there was no mention at the tribunal of the tax implications of the money allegedly paid by Mr Ben Dunne, the Revenue is likely to want to clarify the exact tax position.

Mr Haughey's counsel has said that as a matter of probability he was the beneficiary of Pounds 1.3 million. If tax has not been paid on the money, substantial sums would be owing.

On the Pounds 1.1 million which was paid into the Ansbacher deposits at Guinness & Mahon the maximum gift tax would be Pounds 470,000, if special allowances and exemptions had been used previously. If no allowances or exemptions had already been used, the bill would be about Pounds 440,000.

However, on top of this the Revenue would charge interest and penalties, because the tax bill was not paid at the time the gift was paid. At a standard Revenue rate of interest of 15 per cent, this would make the technical interest liability Pounds 620,000.

In such cases the Revenue Commissioners and the taxpayer normally reach an agreement. Accountants say that the highest penalty usually charged would be equal to the outstanding tax. Thus the maximum amount owed could be as high as Pounds 940,000, or twice Pounds 470,000.

It is also possible that the 1993 tax amnesty could have been used. However, this amnesty was applicable to income tax rather than gift tax.

On the overall Ansbacher deposits, the tribunal also heard that Guinness & Mahon did not know the beneficiaries of the money and that the different accounts in the Ansbacher deposits were coded with letters and numbers.

In its investigations, it is not clear precisely how much the tribunal discovered about these deposits. However, it was indicated that the tribunal will focus on issues related directly to payments from Dunnes Stores to Mr Haughey, as anything else would be outside its remit.

The tribunal was told, however, that a number of "Irish residents" were the beneficiaries of money lodged in the Ansbacher accounts.

These accounts were "effectively offshore" accounts, the tribunal heard, and were controlled by Mr Des Traynor and later by Mr Padraig Collery. Records of the accounts were also kept by Ansbacher in the Cayman Islands, which held the deposits in Guinness & Mahon.

The question now is: who were the other beneficiaries of the money in the Ansbacher accounts and why did Mr Traynor go to such lengths to keep them secret?

It is possible that the Revenue will seek to uncover the beneficiaries of the Pounds 30-Pounds 40 million.