Revenue Seeks to Track Down Overseas Property Owners

This isn't exactly news, it is merely chronicling articles which deal with the subject as it seems to be a very popular one in the media recently. The Revenue is openly co-operating with the writing of these pieces (you'll see one in the SBPost links below from Diarmaid Condon who writes for the site) so there is obviously a big move on to clamp down on overseas investments and the Revenue wants it known that this move is being made.

These are the most recent reports on the initiative from the Revenue to track down overseas property owners from the Sunday Business Post (and others here and here on making a Qualifying Disclosure) and Irish Independent today.

Click here for informative onsite advisory articles dealing with the Revenue.

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Revenue Probes Overseas Property Purchases

It shouldn't come as a shock to very many people that the Revenue have decided they want to find the owners of property abroad so they can check where the funds to buy the property originated and ensure that full payment of Irish taxes has been made on this capital.

Frances O'Rourke in the Irish Times last week reported that an attempt by the Revenue Commissioners to inspect records in Savills HOK's Dublin offices for the names of people who have bought property abroad since 2002 ended when Revenue withdrew its request for information. Savills HOK then withdrew its High Court challenge to the proceedings. You can see the full piece here.

This week the Revenue has announced that it will take a different tack, looking to the Department of Finance to give it the power to access such client lists. Simon Carswell's full Irish Times piece can be found here.

There are two sides to this argument. On one hand it is difficult to argue against the Revenue having access to details of Irish investors purchasing overseas. The Revenue has a legal right to know the source of funds invested abroad by Irish citizens in case the state is at a loss in its tax take. It also has a right to know what income is being made overseas so that it can access any tax it is owed through this avenue.

On the other hand, Irish agents who are forced to give such lists to the Revenue are at a distinct disadvantage. Once such an initiative is launched, those wishing to hide the source of funds or even those who would rather that the Revenue didn't know about their business for less sinister reasons, will simply go overseas and use foreign agents.

The results of this will be twofold, neither of them particularly good. Firstly Irish agents will lose significant business, quite a few will go bust. Whatever you feel about overseas agents, there are many good, conscientious ones out there. They are perfectly entitled to make a living and this initiative could stop them from doing so. Secondly, those Irish investing overseas using foreign agents will be doing so outside any potential regulatory framework in Ireland making it far more likely that they will run into problems while doing so, and far less likely that they will have any recourse should something go wrong.

It is possible that the newly formed National Property Services Regulatory Authority (NPSRA) could be asked to make it obligatory for all companies selling in Ireland to present details of their clients to the Revenue. Unfortunately this would not make it compulsory for agents with no operations in Ireland to furnish such a list and would still leave Irish agents at a significant disadvantage.

Expect this issue to drag on for some time, it is very unlikely that agents will go down without a fight and the Revenue really wants to get its hands on those records.

For a list of advisory articles on taxation issues relating to investing in property overseas click on this link.

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Declare that Overseas Property - Or Else!!!

If you're one of the many Irish who emptied their matresses to buy property in Spain back in the mid to late nineties then be afraid, be very afraid.

There was a short, but very interesting, piece by Ian Kehoe on the front of the Sunday Business Post yesterday (March 16th) about the revenue stepping up its investigations into property owned by Irish citizens overseas. It claims that it has received the names of thousands of Irish citizens (directly from the Irish agents as far as we're aware but this isn't stated in the piece). It says it is predominantly targetting Spain and France at the moment but there is no doubt that this will be spread out to cover all the usual suspects such as Portugal, Hungary, Bulgaria, etc. before too long.

In light of the recent rise in co-operation between countries, particularly those in the EU - with relation to taxation, banking and asset ownership - the question at this stage is not whether the Revenue will find out about undeclared money invested in overseas property, it's merely a question of when. If you've got a property overseas and haven't declared it, or more importantly the money with which it was purchased, now might be a good time to bite the bullet and make a voluntary declaration. You'll be treated far more favourably and save yourself all the extra taxes and penalties you'll incur between here and the time your purchase is investigated.

The Revenue is going for the jugular, it's not overly interested in the rental income achieved by the properties in question (although you can be sure it will ask for a declaration on this) what it is specifically targetting is the capital used to fund the initial purchase and where exactly this came from. If it hasn't been declared in Ireland, then bingo, it's hit paydirt.

The article can be found here but it will move to the archive at the end of the week.

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