DUBLIN: Minister for Finance Michael Noonan is poised to introduce a 20 per cent levy on money overseas investors receive from Irish property held in funds, as he clamps down on a device used by private equity firms to minimise tax bills on property bought here in recent years.
The Government has decided to proceed with a tax in the Finance Bill on Thursday, despite weeks of lobbying by property investors, accountancy firms and corporate lawyers.
Many of these argued that targeting so-called vulture funds will hit the recovering commercial property market and potentially damage Ireland’s position as a major hub for international funds.
Indeed, with Ireland seeking to position itself as an alternative location for London firms weighing options after the Brexit referendum, the Central Bank and Irish Stock Exchange see most activity happening in the funds area. Almost €2 trillion of global assets are currently domiciled in Ireland. However, Mr Noonan has previously emphasised that only Irish property investments in funds will be targeted.
“UK managers are looking to put in place contingency plans, so that if the UK does leave the EU, they will be ready to take the necessary steps to maintain their presence in Europe,” Tara Doyle, head of the asset management group in law firm Matheson, said in article published by the Irish Funds Industry Association this week. “Ireland is well placed to solve any problems Brexit poses for UK managers.”
