Budget 2017: Finance Bill to target vulture funds

Finance Minister Michael Noonan has vowed to use the upcoming Finance Bill to make it more difficult for so-called ‘vulture funds’ and other overseas investors to avail of loopholes in the law to avoid paying tax on assets they hold here.

His declaration on better controls of controversial special purpose vehicles (SPVs) formed part of what was generally seen as being a pro-business budget, with the 9% Vat rate for the hospitality sector maintained; the start-your-own business scheme for entrepreneurs extended; entrepreneur relief revised and a share-based incentive scheme for SMEs introduced.

The crackdown on SPVs will see the Government tighten Section 110 of the 1997 Taxes Consolidation Act, which has allowed overseas investors (including vulture funds) to aquire and house distressed property loans and other risky assets worth billions of euro in Ireland without having to pay tax on profits made on them.