# Revenue Powers for Life Assurance Companies



## Unregistered (28 Apr 2005)

Does anyone have any knowledge/experience of the extent of the Revenue powers for investigating Life Assurance companies ?
Is it only applicable to policies held on or after 23 May 2005, or can they retrospectively investigate policyholders who withdrew their funds before this date?


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## ubiquitous (28 Apr 2005)

The latter


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## ClubMan (28 Apr 2005)

Anything of use in the _Revenue _       [broken link removed]?


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## Unregistered (28 Apr 2005)

It is retrospective and will also cover cancelled policies.  The timeframe Revenue at looking at 1980-2004.


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## Unregistered (29 Apr 2005)

This is as I thought .......
What about if the funds came from another financial institution i.e. Bank, 5 years ago.
Will the Revenue be satisfied about the source of the funds and leave it at that, or will they want to delve further to see the original source ?


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## ClubMan (29 Apr 2005)

I would imagine that where they carry out an investigation _Revenue _will go as far as necessary to verify that the money used was never "hot" - e.g. if one investment was rolled over into another one they would trace back to see where the money originally came from (e.g. earned and taxed income).


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## Unregistered (9 May 2005)

I was asked about this recently and I'm curious to know what qualifies as "undeclared" income as I don't know what it qualifies as?

What happens in the case you had money in a normal bank account that was paying dirt tax as normal but you never "declared" it to the revenue?  

I would presume that if the dirt tax was paid you wouldn't have to declare it to the revenue as the tax has been paid.

Is that the case or am I completely wrong here?


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## WizardDr (10 May 2005)

What the Revenue means by undeclared funds is money that somebody got where there would have been a tax liability had they declared it. Some of this might be undeclared gifts or it will be earnings which went undeclared. They missed this in the Non Resident saga as the DIRT accounts had tax applied.

How the Revenue actually have the balls to go back 25 years frankly amazes me. Clearly their view is that this saga - which they ignored again and again - will affect fairly well off folk. Bear in mind that €20k 25 years ago was a substantial amount of cash.  How they will catch people is simply ask the source. I mean records going back 25 years ..surely everybody has them?

What in essence they have here is single large premiums and they will simply keep asking where the funds came from. 

Mind you they have this power as well with Mortgages .. and where the parents are shelling out cash for their kids.. will in a few years time be 'discovered' as well by Revenue. And they will start that process then. But sure why in heavens name do it in a timely fashion?


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## Unregistered (10 May 2005)

20,000 20 years ago was not a substantial sum of money, I know of certain civil servants, on overtime, who earned it. 

I don't for one minute condone tax evasion, however I think that the revenue, in this latest trawl, will be targeting by and large the most vulnerable in society, namely the elderely. I mean who is expected to keep documentation back to the early 1980's to prove the legitimate source of taxed funds held in these policies. Also, what about the surviving relatives of decased policyholders: How are they to know their  loved one had a tax liability when thay were not the original players, and therefore will not be in a position to offer a voluntary disclosure to revenue as, they are oblivious to the existance of the policy. This latter point happened time and time again to survivors of Bogus non-resudent account holders, who first discovered the exiatance of accounts when they received one of the 7,000 letters dispatched by the revenue commissioners. I think that this action by the revenue is heavy handed to say the least. It has also been well documented that the revenue have used scare tactics on the elderly recipients of such letters , which resulted in them immediately making settlements, wheras in law they may have valid defences against claims to tax. There is a recent EC Law case which may prohibit the revenue from seeking tax arrears on a deceased estate, also if the executor can prove that he carried out the administration of an estete in a propper manner in that he didn't deliberately evade the tax debt: this may be a defence. Also the revenue have claimed that they will pursue the beneficiaries of deceased tax evaders, probanly through tracing in Equity. The benficaries will have defences to such claims. The civil Liability Act may also stipulate a time limit for the revenue to pursue claims to an estate. If of course, a valid inland revenue affidavid was submitted during administration, on the expiration of a fixed time limit, the revenue will be preculeded from re-examining the estates tax affairs. Time runs afesh though when a corrective affidavit is submitted to the revenue.


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## WizardDr (10 May 2005)

I agree with your sentiments and some of what I said was tongue in cheek.

I do think that €20k 25 years ago is a large amount of money as a house would have been bought or substantially for that amount. 

I also accept that many of the folks that will inevitably be caught will now be relatively elderly.

I aslo think that the Tax Amnesty in 1993 was the watershed, and if people made settlements then, as they were obliged to do, then how they arrived at the amount would have struck me as a vital piece of evidence.

The Revenue are acting as if attending to tax problems that they clearly would have known about .. is no reflection on them at all. For example the simple solution that was put to Revenue in 1986 was for them to issue a certificate to the account holder that  they had clearance to open a non resident account. They would not hear of it. In fact anything to do with solving tax problems is not seen as a function of Revenue at all.

They are coming across issues and the dumbest amongst them must know that the complexity of tax - unless you are 100% PAYE - is problematic. The financial journalists that regularly 'lift' issues from this site should wonder as to who exactly the Revenue is accountable to.

The only way that this will be sorted is by way of a High Court action where manners is put on them.

The fact that a large percentage of the population would have been in receipt of dividends gross from credit unions and was always taxable.. and that 2m of us are members is of course a political hot potato that Revenue failed to sort. Mind you I am not saying that it was ever fair to tax the dividend, but that was the 'law' that was put in place.


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## cuchulainn (11 May 2005)

as a previous poster has stated, how will you be able to prove where the funds came from in lump sum investments. Around 1995 I cashed in an Irish Life Policy (deducted from wages) and invested around £5,000   in an Irish Life tracker which by 1998 was worth £8,800 and I cashed this in and invested it in a Scottish Providend policy which in turn produced a de -mut divident ( which I left with Abbey and is earning interest in London at inter bank rates and on which I am currently paying both GB and Irish tax despite filling in that form and handing into Irish Revenue to get it tax free from source).  I then cashed in the Scottish Provident policy and together with some credit union savings invested it in an AVC with Eagle Star ( and got the tax rebate straight away to be fair). I also cashed in another Irish life policy  around 2001( deduced at source) and invested abour €17,000 in Irish Life Scope but unfortunately they have done a Paul Daniels on this and made a large part of it disappear. Point is , every time I cashed in a policy I disposed of all the bumph that I had build up pertaining to that policy as I never though I would need it again. If the Revenue come calling will the various Insurance Companies have records of these previous policies?


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## Unregistered (11 May 2005)

I have posted earlier regarding possible defences to revenue.  I have discovered that my late Father invested 2,000 in 1972 in a single premium policy. I wonder if  this policy will be investigated as I understand that revenue will investigate from 1980 onwards to 2001. I am wondering though if Life insurances companies kept details of policyholders in the 1970's to ascertain if they were single premium or not. I understand the Insurance companies estimate it will cost 300 per customer to assist the revenue, and the insurance companies don't want to foot this bill, as they did not engage in any illegal practices.My late father also had a private pension , contrubiting 1,000 per annum to it from 1980 to 1987, the insurance company said this will not be investigated, eventhough they sent me a letter recently regarding the impending investigation. 

Again I think that it is grossly unfair on People like me , i.e. the survivors of deceased policyholders, to be expected to account to revenue for the legitimacy or otherwise of funds, when we were not the original players. Just because  a policy was a single premium does not necessarily automaticaly mean untaked income, as the revenue claim. In this situation the relatives of deceased policyholders are seriously prejudiced by the effluxation of time, and if this was  an ordinary civil case for the recovery of debt it would be statute barred after six years.

Note: Mary Harney states Nursing Home overpayment claims will be barred from claiming arrears before  1998 for deceased patient's. 

Yet the Government , through their agents namely the revenue, can claim as far back as they wish. 

Please don't get me wrong, I don't condone tax evasion, but it is grossly unfair to penalise deceased relatives of policyholders, who had no act or part in tax evasion, or who are seriously prejudiced in trying to disprove evasion.


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## WizardDr (12 May 2005)

I would also defend the Revenue when appropriate.

The reality is this. Revenue have decided that the single premium business - which they did nothing at all about for 25 years - is a way of forcing people to demonstrate where their funds have come from. It sounds simple. Indeed it is. It is particularly easy if you only had PAYE income in the first place. Which Revenue officials themselves think is a fair  representation of reality. The trouble for the Revenue is that even the IMF knew we had a 'tax collection' problem in the 1980s. It will emerge that Revenue had most of the power they mislead the Oireachtais about. By this I mean that they claimed that they did not have the right to examine the 'bank account'. This was true. Mind you that they had the power to inpect declarations on non resident accounts since 1986. This is also true, but they never said it.  They examined NONE of these declarations up to the time of the Oireachtais Committee. This scandal went unreported and now that they are wearing size 12 shoes ..they will come unstuck.

They are placing the onus on the holder to identify their source. God knows how people will be able to find any records in support. I think what will happen is that a few people will challenge the matter in the High Court. I would be confident that there is a substantial risk that the Revenue will get a severe hiding from the Courts. I believe it will damage their reputation to such an extent that other areas where they severely neglected their duties [NON RESIDENT ACCOUNT - they created the animal]  will start to emerge .. and the DOZY financial journalists will then run with the story.

I do not condone tax evasion but I do condemn neglect by the Revenue of their duties. I would have great sympathy for people many of whom are elderly, and who may along with most of the population have evaded tax for years at that time. [Note two million credit union members and their dividends ..if not returned ..was and is tax evasion! Loving the credit unions as I do .. this is the 'law'!]

I see as the equivalent of poaching, where the gamekeeper knew what was going on, who then was secretly filming it for years. They are as guilty as the evader as they effectively collaborated in allowing the matter to continue.


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## Unregistered (14 May 2005)

I have posted earlier on this topic. There is an interesting article in 2004 Law society Gazette re revenue powers and the bogus non-resident saga , which I will mention later here. I agree that there should be a legal challenge mounted against the latest revenue investigation , amongst others against the revenue's claim to have powers to recover such historic taxes. The article also mentions the Human Rights Act , implementing the Convention on human Rights into Itish law, Which may curtail revenues powers , as would a receunt EC law case against the authority of revenue to charge to tax the heirs of a deceased prrson. 

Revenue's approach is wholly unfair to the survivors of deceased tax evaders, as is the fact that proving the legitimate source of funds is almost impossible owing to signifigant time lapse and lack of supporting documentation, hence the taxpayer is severely prejudiced. 

Again I HIGHLIGHT THE inequity of the Government RE the overcharging of nursing home patients. The government invoked the statute of limitations for deceased patient's who were overcharged, i.e. their estates can only claim for overpayment to 1998 . Yet the revenue can look back indefinitely!


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## WizardDr (16 May 2005)

Unreg ..you should take a look at the Finance Bill.. apparently it has been observed that the Bill includes 'aiding and abetting' all these outrageuous tax evasion practices..step forward Revenue.. as I could see how their gross negligence over the years should not go unchallenged.


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## Duke of Marmalade (16 May 2005)

Surely if you have a "hot" money problem, all you have to state is that you were incredibly lucky at the horses - or do you have to prove that?


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## ubiquitous (16 May 2005)

Revenue refuse to accept that particular excuse in the absence of documentary evidence.


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