Money Never Retires



From top: Department of Finance document urging the closing of a loophole that has cost the exchequer millions; Ken Foxe

Via journalist Ken Foxe:

The PRSA The Personal Retirement Savings Accounts scheme had been introduced in 2002 as a low-cost private pension savings plan, particularly for the self-employed.

However, in the ensuing years, it had become particularly popular among high wealth individuals.

This was explained by a loophole in the original wording, which had been seized on by tax advisers as a mechanism for avoiding tax.

According to Internal Department of Finance documents obtained by Mr Foxe:

“The wording is open to the interpretation that, whilst a PRSA owner who wishes to take benefits from his or her PRSA must do so by their 75th birthday at the latest, there is no compulsion to take benefits at that age (or indeed any age).

While this may seem to fly in the face of the whole raison d’etre for pension savings – i.e. to provide an income in retirement – for those with substantial pension assets it can provide significant tax planning opportunities.”

For instance?

In one example, they describe how through careful planning, a person with a pension pot worth €2.5 million could avoid €200,000 in tax.

Good times

Millions of euro in tax avoided by high wealth individuals through two gaping loopholes on personal retirement plans (Ken Foxe)

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31 thoughts on “Money Never Retires

  1. gringo

    The rich get offended when asked to pay tax, so our legislators build in loopholes to suit them.

    1. dav

      That is the sole function of an irish government – serve the rich and screw over the rest of the nation.

    2. ironcorona

      The government, being composed of super human intelligences, definitely did this on purpose.

      1. dav

        The government is composed of either ff or fg corrupt traitors, not super human, but super corrupt.

          1. dav

            no stating they are stupid absolves them of the responsibility of the pain and suffering they have caused to their fellow citizens as they sold this country off to the banks and the corporations

          2. Biggins

            Hanlon’s Razor – never heard of it but I love it, applicable for most conspiracy theories too methinks

      2. MoyestWithExcitement

        Our neoliberal government who go to all the same bars and golf clubs as the super wealthy, might, MIGHT, have done this through incompetence, but it is by design that the super wealthy get away with things the rest of us would be sent to prison for.

        1. Biggins

          Is it not the Dept of Finance, i.e. the executive branch of Government, that is proposing the closing of this loophole?

          I wish the world was so simple that you could put people in ‘good’ and ‘bad’ categories.

    3. rotide

      Gringo, I’m going to assume you are paye so therefor have zero experience in actually returning taxes.

      I’d love to see you do your taxes one year and not apply for all the breaks you are eligible for

      1. MoyestWithExcitement

        Sure. Someone taking home less than a grand a week, giving themselves breathing space of a couple of hundred quid is definitely the same as a millionaire taking hundreds of thousands they don’t need out of our economy.

          1. MoyestWithExcitement

            Because rich people put their money in holdings, usually that pay yields. Poor people spend it. Consumers are the ones who create wealth and drive our economy.

          2. Clampers Outside!

            @Rotide…. in the grand scheme of things, they dont.

            If you have a persom with a million quid out buying crap for their home, they’ll spend say 30% of the million fixing it up.
            If you have 10 people with €100,000 each to fix up their homes, they’ll all spend more than 30,000 each, and some will spend double that.

            A person with a million quid might buy two cars and drives them but takes longer to get through a tank of petrol than a guy with one car.
            10 people with €100,000 each… will each buy a car and keep all ten filled with petrol regularly.

            Lots of people with some money produce wealth better than one rich person could ever.

      2. dav

        Still can’t get the concept that in a Fair tax system there wouldn’t be any need for loopholes, eh?

    1. CiúnCainteach

      In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.

      1. CiúnCainteach

        Meant to include the context: tax avoidance is an option for the wealthy who can afford to pay professionals to minimise their tax liability. Tax evasion is generally done by regular people (cash jobs, etc). One is legal, the other is not. The outcome for both is the same.

  2. Ferret McGruber

    To define the likes of the above as a loophole is to do both the Department of Finance and the major accountancy firms a disservice. They are strategies worked out in meetings between civil servants and the accountancy firms who readily admit to attending these meetings.

    A perfect example of this would be Section 110 which was put in place specifically at the request of vulture funds who don’t want to pay tax. Ever. On anything. The closing of said ‘loophole’ was recently described by one vulture fund as ‘disgraceful’.

    Homelessness is disgraceful. Evictions are disgraceful. People on hospital trolleys or waiting years for treatment is disgraceful. Allowing the level of tax ‘avoidance’ facilitated by the likes of Section 110 is disgraceful.

  3. ahjayzis

    Don’t finance ministers generally get seconded staff from the big accountancy firms to draw stuff like this up?

    Little too easy to just blame incompetence. They never end up loopholing anything that benefits people who aren’t already rich enough for ten lifetimes.

  4. Kieran NYC

    A proper, progressive inheritance tax would sort that out.

    But that’s something neither the left or right wants in Ireland.

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