Revenue trawl 'unfair' to elderly

Elderly people were being treated unfairly by the Revenue Commissioners in a trawl related to insurance schemes, Independent Mayo TD Jerry Cowley claimed in the Dáil.

He said the trawl related to their aggregate investment in insurance company schemes exceeding €20,000.

In many cases, he said, the initial investment was very small, ie €2,000, and the fund had grown due to reinvestment in other insurance companies by the investment manager.

"Investments grew rapidly in the early years, achieving 30 per cent growth per annum.

"The accumulation of money from that reinvestment by investment managers has driven many thousands of older people into the tax net now whereas they would not be liable based on the original amount invested."

Dr Cowley said in many cases the original amount could not be traced because many of the original insurance companies had gone out of business.

While he agreed that everyone should pay his or her fair share of tax, was it not unfair to go back 25 years considering the small size of the original investment?

"The Minister may say they need not worry, but older people worry and do not eat or sleep.

"This issue is causing terrible worry and consternation among older people with such insurance policies, and who must make a declaration to the Revenue Commissioners by Mary 23rd, 2005."

Minister of State for Finance Tom Parlon said he could assure the House that because some people had invested in life assurance investment products and had legitimately profited from them did not lead the Revenue Commissioners to assume they were engaged in tax evasion.

"The focus of the Revenue investigation is on the source of the money invested in insurance products, and whether it was money that should have been, but was not, disclosed to the Revenue Commissioners."

He was assured by Revenue that, following on from information gleaned from large-scale investigation projects and other research, it was clear that some individuals had used life assurance investment products to hide taxable income, gains or acquisitions.