Taxman uncovers ‘hot money’ deposits in Kerry

July 1991

HUNDREDS of thousands of pounds in “hot money” deposited in non-residents accounts in financial institutions by Kerry investors are being uncovered by the Revenue Commissioners, forcing investors to pay tax on the investments.

A spokesperson for the Revenue Commissioners confirmed that their audit area is now uncovering a large number of illegal tax free non-residents accounts.

The spokesperson added that the discoveries are being made on a nationwide basis. Non residents, with deposits in Ireland, are not liable for DIRT tax on interest earned.

However, The Kerryman understands that some financial institutions in Kerry are calling in customers asking them to change the status of their accounts from non-resident to resident.

The customers are living in Kerry but had falsely declared that they were living outside the State to avail of the tax free bonus on interest on non-resident accounts.

The problem is especially prevalent in the Killarney area.

Some customers are agreeing to change the status of their accounts while other customers are moving their money to financial institutions that are less vigilant about the residency of their clients.

A number of financial institutions are known to have lost a portion of their market share of the deposit business in-the county as a result of the activity of the Revenue Commissioners.

The Revenue Commissioners have uncovered a lot of false non-resident deposit accounts and these have sent a shock wave right through the financial services sector in the country.

Branch managers in some banks and building societies are going through their books to determine if people have falsely represented themselves as non-residents.

And in an effort to pre-empt the tax man and to retain valuable deposits they are asking customers to close down the non-resident accounts and to open legitimate accounts.

The spokesperson for the revenue commissioners warned that those found to be in breach of the law in these cases could be fined up to £10,000 and face six years in jail.

However, it is not known if any prosecutions are yet in train.