Work taking place on the LXV building at the corner of Stephen’s Green and Earlsfort Terrace, Dublin 2 last October
Denis O’Brien took advantage of a new tax-efficient legal entity established by the government last year when he sold a landmark building on St Stephen’s Green in Dublin for a reported €30m profit.
O’Brien reportedly sold the LXV building, on the site of Canada House, for €85m last month.
A Sunday Times investigation has revealed that on May 25 O’Brien transferred the ownership of the LXV building into an Irish Collective Asset-management Vehicle (ICAV), a legal structure established by the government two months earlier to attract corporate investment funds to Ireland.
The Real Estate Development and Investment Fund ICAV was set up by William Fry solicitors, which acts for both O’Brien and Fieldsville, the company owned by Catherine O’Brien, the billionaire’s wife. Fieldsville was responsible for developing the six-storey high LXV block on the corner of Earlsfort Terrace, which is almost complete.
Revenue officials are investigating the operation of a new tax-efficient corporate vehicle designed for the funds industry, which is instead being used for property investments.
.. On Thursday, Michael Noonan, the finance minister, responded to questions about ICAVs tabled by Pearse Doherty, Sinn Fein’s finance spokesman, and their use by [Denis] O’Brien in a property deal.
Doherty stated this had resulted “in the exchequer being deprived of corporation tax, income tax and capital gains tax earned on profits from source assets”.
Noonan revealed the Revenue Commissioners have told him they are “currently examining recent media coverage concerning the use of investment funds for property investments. Should these investigations uncover tax-avoidance schemes or abuse, which erodes the tax base and causes reputational issues for the state, then appropriate action will be taken and any necessary legislative changes required will be considered”.
[Denis] O’Brien did not respond to questions relating to his use of an ICAV. The shareholders for the ICAV used by O’Brien are two William Fry trust companies. The firm regularly acts for O’Brien in tax cases.