Haughey may have to pay up to €4m in fresh tax bill

FORMER taoiseach Charles Haughey is facing a new tax bill of up to €4m to cover undeclared income he received during his time in politics.

The bill, which follows a €1.28m demand from the Revenue Commissioners three years ago, is placing Mr Haughey under growing pressure to dispose of significant family assets to raise cash for the payment.

The Revenue Commissioners refused to comment on the latest demand, revealed in the Sunday Times, saying that dealings with a private citizen were confidential.

No one was available at the Haughey family home to deal with queries yesterday but it is understood Mr Haughey has known for months the scale of the bill awaiting payment and has agreed in principle not to appeal.

Without selling off substantial tracts of land or other assets he does not have cash to make payments and is thought to have postponed formally signing off on the settlement until he has a plan for meeting the demand.

The new tax bill is based on details of secret payments to Mr Haughey which have been uncovered by the

investigative work of the Moriarty Tribunal. The tribunal has so far confirmed payments by a number of businessmen totalling over 10m although this may not be the full amount.

Legally, Mr Haughey could have accepted the payments, even if they were politically ill-advised, if he had declared them and paid gift tax on them.

Gift tax was first introduced in 1974 and is currently charged at a rate of 20% on sums over a tax-free threshold which, in the case of a recipient unrelated to the giver, is €19,000.

In April 2000, he dropped an appeal against a €1.28m assessment the Revenue Commissioners made in 1997 following the work of the McCracken Tribunal which uncovered a series of payments to him by former Dunnes Stores boss, Ben Dunne.

Mr Haughey agreed to pay the full sum, half of which was tax and half accrued interest and penalties, and undertook to sell off family assets to meet the demand within six months.

He sold a tract of land at his family’s Kinsealy estate to raise the cash.

The Dunne payments totalled €1.6 million and the assessment was almost as large so Mr Haughey may have been expecting worse than a bill for €4 million this time around.

Kinsealy estate, which consists of 250 acres and the Abbeville mansion, is worth many times the monies owed by Mr Haughey but the property is owned jointly with his wife, Maureen, and various family members, all of whom have to be in agreement about its division into lots for sale.

Talks on the disposal of parts of the estate have been taking place despite his treatment for prostate cancer. Mr Haughey will be 78 in September.

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