# Has anybody actually been caught for Clawback of Stamp Duty?



## boots1 (5 Oct 2006)

I'm just wondering if revenue actively pursue the clawback of Stamp Duty, where you've claimed first time buyers' and then rent the property within 5 years?

I know its all self-assessment etc but do they actively pursue it?


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## asdfg (5 Oct 2006)

Don't know if they are actively persuing now but who knows what will happen in a few years when taxes etc start to dry up (downturn in the economy). Revenue may then decide to presue all those who paid stamp duty as FTB and subsequently rented the property thereby leaving themselves open to fines and penalties which can be very severe. Just look at the interesr and penatlies paid by recent defaulters


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## whathome (5 Oct 2006)

boots1 said:


> I know its all self-assessment etc but do they actively pursue it?


 
Yes they do actively pursue, some friends of mine had never heard of clawback until they heard from the revenue.


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## ClubMan (5 Oct 2006)

asdfg said:


> Revenue may then decide to presue all those who paid stamp duty as FTB ...


I presume you actually mean who paid no or reduced _SD _as (ostensible) owner occupiers (_FTB _or non _FTB_)?


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## asdfg (5 Oct 2006)

Sorry need to clarify, as OP mentioned FTB I continued in that vein incorrectly and should have changed details to read Revenue may presue those who paid stamp duty *at the reduced rate (as owner occupiers and those who were exempt from paying SD)* and subsequently renting out the property....... Thanks Clubman for bringing this to my attention


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## summerhill (10 Oct 2006)

Yep, I have also heard of a few people receiving letters from the Revenue querying if they were still owner occupiers. I'm thinking that they may have drawn attention to themselves somehow - for examle ringing up revenue and asking to send any further correspondence to a new address. They were tax compliant so the query was no problem for them. 

However, I don't think the Government has the resources or the wherewithal to do a comprehensive job on tracing stamp duty clawback.


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## monkeyboy (10 Oct 2006)

Clawback could range from anywhere between 2/3k to 20/30k and more.....
It would be quite efficient to say, target all transactions where, if clawback was found to be applicable, it would be for arguments sake, 10-20k.
If you go hunting in a pool of purchasers where anyone caught is liable for 10-20k then it could be well worth while doing this.

Im sure some level of random checks also apply but to me if a conscerted effort was engaged it would be most efficient targetting a clawback bracket that matches the resources required and makes the excercise "profitable".


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## ubiquitous (10 Oct 2006)

summerhill said:


> However, I don't think the Government has the resources or the wherewithal to do a comprehensive job on tracing stamp duty clawback.



They don't need these resources. They can at the stroke of a pen screw all SD defaulters to the wall by repeating what they did to holders of offshore & bogus non-resident accounts - simply announce an initial "incentive" deadline for SD defaulters to declare themselves and cough up in order to have their penalties capped at a certain rate, wait a few months and announce a second deadline with full penalties applying, only this time people will be prosecuted if they don't comply,

Of course this is only effective in terms of raising serious money if it postponed a number of years during which time interest is rolling up on the default amounts on a daily basis. This is why this particular initiative won't happen for at least a couple of years hence.


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## summerhill (10 Oct 2006)

Well, not quite a stroke of a pen then! I mean, are they going to go knocking on doors to see do the registered owners actually live there? With 70,000/80,000 new homes being built here every year that's a mammoth task. And given that thousands of people are away at work all day every day it would be difficult even to meet the occupier of a home!!

Were an "Incentive deadline" introduced, I think defaulters would weigh up their options and choose to keep their lips sealed. Probability of being found out is still extremely low.


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## CelloPoint (10 Oct 2006)

summerhill said:


> Well, not quite a stroke of a pen then! I mean, are they going to go knocking on doors to see do the registered owners actually live there? With 70,000/80,000 new homes being built here every year that's a mammoth task. And given that thousands of people are away at work all day every day it would be difficult even to meet the occupier of a home!!
> 
> Were an "Incentive deadline" introduced, I think defaulters would weigh up their options and choose to keep their lips sealed. Probability of being found out is still extremely low.



Well there is a little thing called the PRTB who record the details of the landlord and the names of the tenants. So all it would take would be for the PRTB's database to be linked up to the Revenue's database - a very straightforward operation in the year 2006. Really, the only way for a FTB owner to be 'safe' to avoid SD clawback, is to rent cash in hand - exposing himself to even greater penalties and/or an unruly tenant. Is the risk worth it?


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## liteweight (10 Oct 2006)

Ok, not the stroke of a pen.....but a tap on, a now highly sophisticated, computer system!  They could quite easily generate a letter to all FTBs in past five years, querying whether they still reside at the property in question. AFAIAW the onus is on the taxpayer to prove they don't owe tax, not on the Revenue to prove they do. I'm sure there are a number of ways they can cross check now, if they so desire. If the property market starts to fall and the coffers are no longer bulging with all that stamp duty, I think we could see it on the cards!


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## liteweight (10 Oct 2006)

CelloPoint said:


> Well there is a little thing called the PRTB who record the details of the landlord and the names of the tenants. So all it would take would be for the PRTB's database to be linked up to the Revenue's database - a very straightforward operation in the year 2006. Really, the only way for a FTB owner to be 'safe' to avoid SD clawback, is to rent cash in hand - exposing himself to even greater penalties and/or an unruly tenant. Is the risk worth it?



That's a good point. Landlords can't claim interest on mortgage as an expense if they are not registered so more and more are coming on stream. However, I imagine anyone who didn't pay clawback and has rented the property, is probably still claiming TRS (another black mark), and will not have registered.

I don't think too many are willing to pay cash anymore for rental either.


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## ubiquitous (10 Oct 2006)

summerhill said:


> Well, not quite a stroke of a pen then!



Fair enough. I should have said 2 press releases


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## Oilean Beag (10 Oct 2006)

The PRTB is only the start of the paper trail. 

What about utility bills ? If you rent out your property are you going to keep them all in your own name ? What about the bills in the place you actually live ? 

What if your tenants want rent relief , which they are entitled to ? 

What if you get your post redirected so your tenants don't lose or open it ? 

It would be like taking candy from a baby if the Revenue ever chose to pursue it,  and the money saved in trying to rent out a property while travelling etc might seem like a pittance compared to what they could slap you with. 

The government coffers will inevitably run dry  and they will be looking for money anywhere they can find it.


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## summerhill (10 Oct 2006)

I agree that there are ways the Govt could attempt to trace stamp duty offenders. To refine my point - Some defaulters will be more easily traced than others - eg. those registered with the PRTB versus those not.  Yep it's compulsory to register but that's not the theme of this thread - rather the debate is how likely are they to be caught. 

Ubiquitous - two press releases.... won't guarantee anything. Like I say
a hypothethical landlord who has not registered with the PRTB, takes cash from 4 or 5 tenants, and may even still live at that same address himself! is unlikely to lose his composure at the sight of a Govt press release.


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## asdfg (10 Oct 2006)

Revenue could also run a comparission against the electoral list. If there are 2 or more names registered against that property and the owner is registered at the address or elsewhere an investigation will be warranted.


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## ubiquitous (10 Oct 2006)

summerhill said:


> Ubiquitous - two press releases.... won't guarantee anything. Like I say a hypothethical landlord who has not registered with the PRTB, takes cash from 4 or 5 tenants, and may even still live at that same address himself! is unlikely to lose his composure at the sight of a Govt press release.



That is a matter of opinion. However, the "2 press releases" approach definitely worked for the Revenue in relation to Bogus Non Resident and Offshore Account holders - so much so that the attendant publicity scared these people so much that they were almost literally beating down the Revenue's door in advance of the stated deadlines. 

For many years previously, some very intelligent and streetwise people had said that the Revenue could not possible comb every bank in Northern Ireland, Great Britain or elsewhere for accounts held by Irish residents, nor could they verify properly all the addresses given by people when opening DIRT-exempt non-resident accounts in Irish banks. As it turned out, they didn't have to. 

There is no reason why this strategy won't be used again and again in the future in relation to different tax evasion issues. There is no reason either why it won't succeed each time. Fear is a pretty powerful human emotion, and with interest being charged at 12% per year _ad infinitum_ there is no rope as long as time...


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## liteweight (11 Oct 2006)

ubiquitous said:
			
		

> There is no reason why this strategy won't be used again and again in the future in relation to different tax evasion issues. There is no reason either why it won't succeed each time. Fear is a pretty powerful human emotion, and with interest being charged at 12% per year _ad infinitum_ there is no rope as long as time...



Revenue's strategy was certainly very effective. Fear can be used as a very powerful weapon, especilly when those who have not paid the clawback come to the realisation that ignorance is no excuse! Revenue is a 'machine' and time is of no consequence. With regard to offshore accounts, Revenue even went after the dead!! Widows, some of whom probably had no idea how their husbands had handled their finances, suddenly found themselves faced with a tax liability.



			
				summerhill said:
			
		

> Ubiquitous - two press releases.... won't guarantee anything. Like I say a hypothethical landlord who has not registered with the PRTB, takes cash from 4 or 5 tenants, and may even still live at that same address himself! is unlikely to lose his composure at the sight of a Govt press release.



Perhaps not, but his tenants might take note!! I think most people realise that they can claim tax relief against rental income. The landlord might ask them not to do so, but he has no guarantee that at least one of them won't do it. He also can't guarantee that they won't report him at the end of the tenancy.


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## jrewing (11 Oct 2006)

I bought a house as a FTB a year ago for Eur 170k and will be living there until summer 2007, when I intend to move house. 

When deciding about whether to sell the first house or retain it and rent it out, obviously I have to consider the SD I will have to pay retro-actively. At what rate would I have to pay SD if I want to rent out this house?


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## NorfBank (11 Oct 2006)

whatever the prevailing rate for an owner occupier was at time of purchase. 3% I think so EUR5100.
It's been discussed in detail elsewhere.


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## asdfg (11 Oct 2006)

You have to check and see what the rate was for investment property when the property was bought. 
It is payable on the date the property is first let and you have a month to pay it. After that interest and penalties apply.


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