Banks are just not getting a (tax) break

Current Account: Pity the poor banks, they must feel Charlie McCreevy is out to get them. And with some justification.

Word is that the pre-Budget tax strategy papers - the freedom of information revelation of all the dreadful taxes civil servants were planning to impose on us - will have no mention of the bank levy announced on Budget day. The inevitable conclusion is that it emerged late in the day from the McCreevy/Ahern/Harney political axis that made the key Budget decisions.

As if that was not enough, McCreevy lost no time in shutting down a tax scheme that would have guaranteed AIB a nice price on the sale of its IFSC building by offering the purchasers tasty tax breaks. It had been expected to go for €90 million to €100 million, but property sources believe that the likely sale will now be for considerably less. Which will make it all the more expensive for poor AIB to pay its bank levy.

The IFSC, of course, has a long history of opening - and closing - tax breaks, which have attracted investors as diverse as AIB chairman Lochlann Quinn and his Glen Dimplex colleague Martin Naughton, as well as a host of high-rolling barristers, accountants and businessmen. Many got in before the 1998 restructuring significantly reduced the tax attractions.

However, some investors were famously hit by the insistence of the EU Commission on the early phasing out of the special rent and rate reliefs that used to apply to the buildings. Among those affected by this were the partners in A&L Goodbody solicitors, who invested in a large block, which is now their headquarters, only to see part of the tax benefit disappear before their eyes in the 1999 deal between the Commission and the Government.