Three of the four children of former Taoiseach Mr Charles Haughey did not pay any gift tax after they were given land in 1989 by their parents at Kinsealy. The land could have been worth up to £8 million, it emerged at the tribunal yesterday.
This was because the land was valued by the Revenue Commissioners at only £1.2 million, counsel for the tribunal Mr Jerry Healy SC, said.
Only Ms Eimear Haughey Mulhern was obliged to pay gift tax and paid over £41,000 in 1990 because she had already benefited from other gifts. These included interest-free loans from her father and the use of his land rent-free, bringing the total of gifts to her over the £150,000 threshold.
However, the tribunal heard, her brothers Conor, Sean and Ciaran did not have to pay tax. Their share of the land, when valued at £1.2 million, was £300,000 and they qualified for agricultural relief, bringing them below the threshold for the payment of gift tax.
Mr Healy said the valuation office of the Revenue Commissioners had valued the 227 acres at £1.2 million. The valuation office appeared to be unaware of information in another section of the Revenue Commissioners which estimated the value per acre of the land in 1980 at £35,000.
This valuation was established in a contract drawn up between the Haugheys and the Gallagher group for the "purported" sale of a number of acres. A deposit of £300,000 was paid by the Gallagher group but forfeited when the deal did not proceed. This was known to the Revenue Commissioners.
If this valuation had been applied in 1989, the land would have been worth £8 million, he said.
The capital acquisitions tax division of the Revenue was unaware of the 1980 details, Ms Iris O'Donovan, its assistant principal officer at the time, said.
However, there was a 1992 newspaper cutting in her file which detailed how Mr Haughey had handed over an £8 million estate to his children.
Mr Christopher Clayton, who was a senior tax inspector at that time, said it was immaterial whether this information was available to the valuation office in 1989. He said they would not have valued the land according to prices nine years earlier. They would have looked at comparable land sales at the time to reach their £1.2 million evaluation, he said.
He added that all information on each tax payer could now be found in one place. Earlier Ms O'Donovan explained that self-assessment for capital acquisitions tax was introduced in September 1989 and when Haughey Boland & Co submitted Ms Eimear Haughey Mulhern's return for capital acquisitions tax in January 1990, it was considered "reasonable" and was not questioned.