Archive for the ‘irish economy’ 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.

Fine Gael front bench backs Kenny

February 9, 2010

Why wouldn’t the Fine Gael front bench back their leader?  They are guarding their seats like the plague.   What would be their plan B?  They forget that the election of George Lee saw many many voters defect from other parties.  It’s possible that voters who hadn’t voted much in the past swung into action behind George.

George Lee being snapped up by FG was like a local football team getting a top player from Chelsea but FG dropped the ball and for this reason they don’t deserve to be in government any time soon.  You snooze, you lose and that is what has happened to FG.

The electorate has been ‘had’ yet again by senior politicians who are more interested in hanging on to their jobs for dear life rather than considering what is in the best interest of the State.  Enough of the greed.  We need serious leadership to get us out of the fine mess that we are in.

George Lee – Fine Gael have lost their passport to power

February 8, 2010

What an opportunity missed for Fine Gael.  Does nobody in that party realize what an asset they had in George Lee.  He was one of the very few people in the country who had the ear of the masses.  His grasp of our financial predicament has been superb over a number of years.  Fine Gael didn’t deserve him.  They missed a critical opportunity to leverage themselves into power. So long Fine Gael – your party is on the road to nowhere.

Well done George for biting the bullet and bailing out.   Time is too valuable to waste backing a loser.  We need you back at RTE biting at the heals of all our politicians.  We need to turn this country around and we cannot wait for the Fine Gael slow coaches.

Fine Gael’s loss of George Lee is a very very happy day for Fianna Fail.

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

Irish Social Welfare Payments highest in Europe

August 14, 2009

It’s amazing to compare our social welfare payments with the UK.  Our unemployment benefit alone has gone from 66pct higher than the UK in 2003 to 200% higher in 2009.

Weekly Unemployment benefit comparisons for 2009

Ireland  euro 204.30       UK  euro 69.58

Weekly Old age Pension comparison.

Ireland  euro 230.30     UK  euro 109.54

Irish Hotel Tax Incentive Schemes and their downfall

August 14, 2009

Irish hotels have benefitted from a myriad of tax incentive schemes which are now seriously affecting the tourism industry as a whole.  The tax breaks were exploited to such an extent that not only were too many rooms added creating massive over-capacity but many hotels were built in ridiculous locations.  Tax break hotels were often built by developers rather than hoteliers and all they cared about was a 7 year tax freebie.  They couldn’t have given a jot about the guest.

The sting in the tail of the tax break is that if a hotel that has benefitted from these tax breaks does not stay open for seven years after the development, the investor will have to repay the tax breaks against their personal tax bills.  What we have now is a situation where unprofitable hotels remain open, reducing rates to ridiculous levels thus seriously damaging those operations that are viable.  The Irish Hotels Federation has calculated that there are 21,000 hotel rooms that fall short of the 7 year requirement (out of a total number of about 60,000 hotel beds in the country).  Another scary figure is that the average occupancy rate over all hotels in Ireland is just 53pct and overseas visitors to Ireland this year have declined by nearly 19pct.

Examinership Fees

August 14, 2009

An interesting article about examinership fees appeared in the Irish Times, Monday, 3rd August, by John McManus entitled ‘Examinership fees need to be examined very closely’.  Lawyers and accountants seem to be still living in Celtic Tiger bubble land where charges of euro 250 per hour for photocopying are in order.  Given the number of examinerships being applied for, unless these fees are reined in, these two professions will continue to roll in the money whilst many many people elsewhere in the country will be seriously licking their wounds.

Examinership – My understanding of it

August 14, 2009

This is a mechanism for ailing but potentially viable companies to be rescued and returned to profitability.  It was introduced by the Companies Act of 1990 and 1999 and is somewhat similar to chapter 11 in the US and administration in the UK though the latter gives more support to the creditor than the debtor.  The period given for examinership is up to 100 days.

Examinership allows a company a period of protection from creditors in order to work out a plan for fresh investment and most likely the writing off of claims from creditors.  The court appoints an examiner who tries to come to an arrangement for the company that is acceptable to the creditors.  The court has to be satisfied that the creditors wouldn’t be worse off than they would if the company was liquidated.

The directors continue to manage the company whilst in examinership (unlike administration in the UK where the administrators take over).

An unsuccesful examinership ends in liquidation.

Aga Saga solved

June 18, 2009

Happy Days!  Graham Summerskill is the aga expert and he took very little time to fix our aga.  He works out of Waterford so covers a wide area and is well worth waiting for!!   Forget Murray Cleaning and Maintainance – A total rip off.  We were left minus our oil meter on our oil tank and a bill for euro 365 for an aga that was still broken.

It took Graham Summerskill just 20 minutes to figure out the real problem and a few days to order the new part – More importantly at euro 178, his bill including the part was a fraction of that charged by Murray Cleaning and Maintainance – And remember, Graham has to travel from Tallow in Waterford.

The Ireland rip off days are over so wake up Murray Cleaning – Once bitten, twice shy.  We won’t be recommending your aga servicing ability to anyone who has any sense.  Lets hope that a few people benefit from this blog!!

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