Net closing on Ansbacher cases

A small number of people who had funds in the Ansbacher deposits have claimed to the Revenue that they made use of the 1993 tax amnesty. The claims mean Revenue's inquiries have not yet commenced in those cases - but this does not mean the tax authorities have accepted the claims at face value.

The controversial amnesty, introduced by the then minister for finance, Mr Bertie Ahern, allowed tax evaders to settle with just 15 per cent of the amount due.

Persons who availed of the amnesty were issued with a certificate specifying that this had occurred, and production of this certificate prohibits the Revenue from investigating those persons' affairs prior to the date of the amnesty.

If the Revenue wishes to look behind a certificate issued under the terms of the 1993 amnesty, it has to make a case to the Appeal Commissioners. The hurdle which has to be crossed before permission is given is high - though if the Revenue's Ansbacher inquiries have found post-1993 movements on the account of an individual who availed of the amnesty, it would be in a strong position.

At the time of the amnesty, it was felt that many people were making illegal, partial disclosures in order to get their hands on the powerful certificates.

There are, of course, two major inquiries under way into the Ansbacher deposits. These are the Revenue inquiry and that of the inspectors appointed by the High Court. The latter has been ordered to list the names of the people who operated the Ansbacher deposits and their customers.

Having had an Ansbacher account is not necessarily a crime. On the face of it, it would seem there is nothing in the 1993 tax amnesty that would preclude the inspectors from naming someone who had availed of the amnesty as having had an account.

Non-residents who had accounts are also expected to be named. There appears to be nothing to preclude the inspectors from stating that a non-resident had an account but had committed no offence. It is believed a number of Irish non-residents had accounts.

Overall, a large number of people are involved in the Ansbacher affair. In an answer to a Dβil question in October, the Minister for Finance, Mr McCreevy, said there were 182 "Ansbacher-type cases" known to the Revenue. In 29 of these cases, the Revenue had not yet commenced inquiries. The reasons for inquiries not having commenced are: insufficient information, non-residency, or the 1993 tax amnesty having been claimed.

It would seem there are very few cases where the Revenue became aware of an Ansbacher account and were unable to establish what person or company lay behind it. The same is presumably true for the inspectors.

This would seem to indicate that the outcome of the court hearing in the Cayman Islands this year - where the judge ruled that some information could be handed over to the inspectors, but not the account-holders' names - had little negative effect.

Of the 182 "Ansbacher-type cases" mentioned by Mr McCreevy, 121 cases were named by the authorised officer, and 61 were discovered by the Revenue.

The investigation includes examining the tax position of disclosed entities and accumulating and assembling information on other connected parties. The number of connected parties in relation to core cases under investigation is now more than 600.

These connected parties are understood to include the beneficiaries of trusts, most often members of the families of the people who established the trusts, and companies and persons who made undeclared profits that were lodged to Ansbacher accounts or trusts.

What is involved is "an extremely complex web", according to one informed source. In some instances, beneficiaries are discovering that inheritances received a number of years ago are now leading to significant tax bills. Some observers have noticed how substantial homes owned by the families of a number of former accountholders were put on the market last year and earlier this year. The inquiries are having an effect.

That said, the amount of tax collected to date, about £14 million (€17.8 million), is modest considering the size of the investigation. Only two cases have been settled. Almost all the money so far collected constitutes payments on account.

The inspectors' report is expected before the end of the year and it is thought Ms Harney will seek to publish it without delay. But there may yet be a challenge. The Revenue, as settlements proceed, will also be publishing names. The "golden circle", which many believe existed in Irish society in the latter decades of the 20th century, is facing an unhappy Christmas.