RTÉ will pay more than €20m tax on Montrose land sale
Broadcaster’s net gain will be ‘significantly less’ than €107.5m price tag
The State-owned broadcaster sold 8.64 acres of its Montrose campus to Cairn Homes for a gross figure of €107.5m in a deal completed last July. Photograph: Cyril Byrne
RTÉ will pay a tax bill of more than €20 million on the sale of its land, while some €10 million of the proceeds has been used to pay down part of its debt, the Public Accounts Committee (PAC) has heard.
RTÉ’s chief financial officer, Breda O’Keeffe, said a “significant” tax bill arose on last year’s land sale, on which RTÉ is liable for corporation tax at the non-trading income rate of 25 per cent.
The State-owned broadcaster sold 8.64 acres of its Montrose campus to Cairn Homes for a gross figure of €107.5 million in a deal that was completed last July. The sum far exceeded the guide price of €75 million.
RTÉ management has been keen since then to dispel the idea that the money represented a bonanza for the broadcaster, which has consistently called on the Government for changes to how the television licence fee is collected, along with other reforms, on the basis that it is cash-strapped.
“We will have significantly less than €107.5 million,” Ms O’Keeffe said, adding that the total would also have been reduced by the cost of “sales-enabling projects” such as the construction of a new site entrance on the Stillorgan Road.
This involved the demolition of a creche built nine years ago, while other campus developments to facilitate the sale include the relocation of the Fair City set.
However, Ms O’Keeffe said there had still been “a healthy gain” from the sale of the land, with “the majority” of the fund – or some “€30 million to €40 million” – being used for capital investment.
The rest of the available proceeds has been used to pay for RTÉ’s voluntary redundancy scheme and to pay down debt.
RTÉ repaid €10 million of a working capital loan it has with Bank of Ireland in order to reduce its interest bill. The broadcaster’s subsidiary 2rn has a separate €53 million project loan facility agreement with Barclays Bank Ireland, which relates to the construction of the digital terrestrial television (DTT) transmissions network.
The broadcaster has signed off on its accounts for 2017 and they are now with the Department of Communications, which will publish them in the coming months.
The accounts, as well as giving further details about the land sale, will show that RTÉ made its third consecutive annual loss and its seventh loss in the past nine years.
“It may appear to some that RTÉ has plenty of money,” RTÉ director-general Dee Forbes said in her opening remarks to the Oireachtas PAC.
“But given the scope and breadth of our statutory obligations, the range of services we must provide and the nature and scale of the competition we face, RTÉ now has inadequate resources.”