Archive for the ‘celtic tiger’ Category

Nama, the bank assets and the solicitors letters as collateral

March 14, 2010

Another incredible bombshell.  Nama (the National Asset Management Agency) are discovering that banks accepted solicitors letters as collateral against loans to developers worth hundreds of millions.  So why no documentation?   Quite incredible.  What this means is yet more money paid out to lawyers to sort this out.

Who had first lien on the assets??   I suspect that double pledging was rife and the banks may find that they were way down the pecking order in thier lien over the assets.  The banks will doubtless threaten the developers with legal action but at the end of the day, yet again the tax payer will end up footing the bill as we bail out both the banks and the developers.

irish tax loophole insanity

February 7, 2010

Each week we are treated to new revelations as to how the wealthy dodged taxes in the celtic boom.  Here are just a few that I learned about from today’s papers.

1.  Stamp Duty Avoidance by Developers.  There was a mechanism called ‘resting on contract’ used as a vehicle to avoid stamp tax on property purchases.  Many developers were able to avoid this tax by never taking title to the property despite paying for the asset.  Seemingly, even local authorities used the loophole.

This is apparently proving to be a major issue in relation to Nama.  The banks have the assets as collateral but exactly what happens in a default scenario if the title is still registered in the name of the former owner?? Very tricky.  I see lawyers getting very rich on this one!! Once again, we taxpayers were conned.

2.  Capital Gains Tax Loophole.  Wow, this really shocked me as the transaction is so simple that it is hard to believe that it existed.  Here is how it worked.  A Capital Loss needed to be created to offset Capital Gains.  To do this, you would simultaneously purchase and sell Irish Gilt futures.  The transaction would generate a profit and a loss for the same amount.  The profit would be free of CGT but you could claim a tax break for the losses.  You could then use the losses against any capital gain,  property purchase or whatever.  Simple!   I wonder how much the exchequer lost on that.

3. Section 482 Relief available to passive investors has been closed off.  These investors put money into section 482 buildings and gardens.  Taxpayers – If you want an example of where your  tax money went under this scheme, just check out the state of Dunboy Castle near Castletown Bere.  Millions squandered with no hope whatsoever of a recovery.

Yes, we all know it – we taxpayers have been well and truly had!!

posted by Catherine FitzMaurice, Kilbrogan House, Bed and Breakfast

Brian Lenihan amazes the Europeans

May 4, 2009

I cringed when I read Anne Lucey’s article in the Irish Times entitled ‘Europe ‘amazed’ at steps taken in budget – Lenihan’ with a photo of a smug Brian next to it.    Yes, Brian, there would be riots in France.  Yes, Brian, the global downturn has disproportionately affected Ireland’s economy but only because you and your predecessors lined the pockets of the speculators and the wealthier people of our country and created ridiculous tax incentive schemes even at the height of the boom.   We haven’t rioted because we are in a far far worse state than France.  We have no choice but to pay for the mess that you have landed us in.  Yes, anybody who voted no to Lisbon last time around would be a mug to vote no now.  Europe is our only hope the way we are heading!

Our social security payments are way too high, our minimum wage is too high and our public pensions are way too generous.  This all has to be paid for.  No wonder the migrant figures are swelling the numbers of the unemployed.  I wouldn’t be beating a fast track back to Poland if I can get incredibly generous unemployment benefit here.

Time to wake up Brian.  We are in a worse state than you can imagine.  Start focussing on entrepreneurs and forget the 100pct fixation about multinationals that can dump us in a heartbeat.  Other countries will create tax incentive schemes to match.  We can’t compete with low wage countries. We have to be creative and that’s why we need the entrepreneurs.

Remember, the bulk of all the bad loans that every one of us will have to pay for relate to less than 40 very powerful, politically well connected, still very rich people.  The rest of us are the poor sods who will spend years bailing them out.  I wanted to throw up when I read Niall Mellon saying that we are all in this together.  Niall – Wake up.  Not all of us were so greedy and now we get to pay for your mess.

Enough said