The former Taoiseach Mr Charles Haughey paid more than £1 million in gift tax to the Revenue Commissioners last August arising out of payments to him which were disclosed at the McCracken tribunal.
The money was paid after a settlement was reached by Mr Haughey with the Revenue Commissioners. The settlement reached was regarded by the Revenue as a "satisfactory outcome", chairman of the Revenue Commissioners Mr Dermot Quigley told the Moriarty tribunal yesterday.
He said that while the settlement was confined to capital acquisitions tax on payments disclosed at the McCracken tribunal, the Revenue's investigations were continuing into tax liabilities on further disclosures made at the Moriarty tribunal.
Outlining the background to the payment, Mr Quigley said that following the publication of the McCracken report in August 1997 assessments were made of Mr Haughey's gift-tax liabilities. The assessment made was appealed by Mr Haughey and the appeals commissioners reduced the assessment to nil in December 1998.
Mr Quigley was dissatisfied with this outcome and was "determined to pursue the case vigorously to secure a successful outcome from Revenue's point of view".
He said the Revenue approach was reviewed in depth and it was decided to bring the matter to the Circuit Court. But before doing so it was felt the Revenue should establish independently through its own efforts all of the facts and circumstances surrounding the payment of £1.3 million by Mr Ben Dunne to Mr Haughey, which was established by the McCracken tribunal.
The investigation was undertaken by a joint team of officials from the capital taxes division and from the chief inspector of taxes office. "The case was probably without precedent in terms of its features, involving the need to establish a trail of money through offshore accounts, and complexity," Mr Quigley said.
As a result of the investigation during 1999, Mr Quigley believed the Revenue would be in a strong position to have its original assessment reinstated at the Circuit Court.
Before the hearing, there were approaches from Mr Haughey's agent, Haughey Boland & Co, to settle the liability and negotiations took place.
The board agreed in principle at a meeting in March 2000 to enter into a settlement with Mr Haughey and received a cheque from him in the sum of just over £1 million in August 2000.
Mr Quigley said that as chairman of the Commissioners he ultimately took responsibility for that decision and assessment.