Rich using tax loopholes to buy children €1m homes – Joan Collins

Wealthy families are using tax loopholes to transfer homes worth more than €1 million to their children and avoid inheritance tax, the Dáil has heard.

Independent TD Joan Collins also claimed recipients were then abusing the terms of the tax relief by renting out those houses.

Ms Collins said families were using the dwelling house exemption section 86 relief “where second and in some cases third and fourth homes are being bought for children, often for over €1 million.

“And if children live in these homes for a particular period of time they can inherit them tax-free when their parents die.”

She said “tax experts say well-heeled people are now gifting houses worth €1 million over to their children and using the tax exemption to avoid tax.

“And many people are breaking the rules of the relief by renting out their properties.”

The number of people claiming the relief had risen from almost 500 in 2012 to 741 last year, she added.

The tax relief was introduced in 2000 and Ms Collins said “the abuse of this scheme has been a concern of Revenue for years”.

‘Close it’

She said she expected the loophole would have been closed in Budget 2017, but it was not.

“The Minister has said he’s considering the issue. What is there to consider? It’s a loophole. Close it.”

The Dublin South Central TD said tax evaders using offshore companies, who had already been identified by Revenue, “have been sent letters warning them and giving them six months to get their tax affairs in order”.

“Any ordinary taxpayer who owes money to Revenue are told they have to pay it up-front and pay it over a period of time.”

She asked Taoiseach Enda Kenny “why is there such reluctance within the political establishment to make very profitable companies and wealthy individuals pay tax in this country?”

She said: “I want you Taoiseach to explain to the people of Ireland why this opportunity is not being taken in budget 2017 to close this loophole of dwelling house exemption section 86 relief”.

Mr Kenny told her Minister for Finance Michael Noonan "has made changes to the thresholds in relation to the inheritance tax and also in relation to section 1.10 in regard to vulture funds".

He said “the Minister obviously doesn’t favour either tax avoidance or tax evasion and has closed many loopholes in his time as Minister for Finance.

“I’d suggest you put down an amendment with the specifics of what you’re talking about.”