Revenue inquiry identifies 200 trusts

THE REVENUE Commissioners’ special inquiry into trusts has already identified 200 trusts and offshore structures that it intends to examine closely.

The structures were identified through the examination of banking and other financial information relating to clearing accounts held here by foreign banks, and received as a result of High Court orders.

In an update on its inquiry to The Irish Times, the Revenue said the identified structures are located in Guernsey, Jersey, Switzerland, Liechtenstein, Cyprus, the Isle of Man and the Cayman Islands.

Persons with trusts which control undeclared income have until September 1st next to inform the Revenue that they intend to make a disclosure under a scheme which limits penalties, prevents public disclosure and secures immunity from prosecution for those who avail of it.

The scheme applies to Irish and offshore trusts.

“These inquiries will cover all historic years for which there are tax issues – not just the last few years,” the Revenue said.

As well as using information obtained from banks, the Revenue is making use of information from third parties on offshore settlements made by Irish settlors in the years since December 24th, 2003.

“Under recent Finance Act legislation, Revenue will be getting third party returns on transfers and settlements of assets and funds, made by Irish resident and ordinarily resident persons, involving non-resident trustees,” the Revenue said.

“The returns will be delivered to Revenue over the coming months by tax, accounting and legal advisers, as well as by the banks and financial institutions.”

These third party returns will give the names and addresses of the Irish settlors and the non-resident trustees.

“Linking the trusts and the structures to the beneficial owners is what project investigations is all about. Revenue will follow the money trails to discover patterns and methodologies used to conceal the beneficial owners.”

As part of its work on the issue, Revenue officials have met with representatives of the accounting, taxation advice, banking and legal professions.

“The scope for escaping detection, and evading tax, through the use of trusts and offshore structures, is diminishing,” the Revenue added.

The decision to have a special scheme for persons with tax issues associated with funds in trusts and offshore structures, follows from special inquiries into other areas where undeclared income was hidden.

“Earlier Revenue investigations revealed that the combination of offshore banking and trust services represented a real tax risk. It was clear that trusts and offshore structures were being used to keep funds offshore and out of sight of Revenue and to create the impression that the non-resident entities were the owners of the funds.

“This type of abusive tax planning is simply an attempt to conceal the identities of the Irish beneficial owners of the funds and ultimately to evade Irish tax,” the Revenue said in its update.