'Golden circle' can claim €80m in tax relief
THE 'golden circle' of 10 investors who borrowed more than €450m from Anglo Irish Bank to buy shares in the institution could claim back more than €80m in tax relief on their massive losses.
And the 10 'long-standing' clients can do so without having to wait for the Government to determine the value of the stock following the nationalisation of the beleaguered bank.
As their €451m investment is now largely worthless, the 10 investors will be able to offset losses totalling this amount against any future profits from the sale of shares, investment property or other assets.
A Sunday newspaper yesterday named four of the 10 alleged businessmen who bought a 10pc stake of the bank last summer. None of the four were available for comment last night.
Outrage
But revelations that the investors are set to benefit from tax breaks sparked fresh outrage last night. Labour said it was putting forward a series of amendments to the Financial Emergency Measures Bill in a bid to prevent Anglo's 'golden circle' from availing of the tax relief on failed investment.
"We will also move an amendment to limit bankers' pay to the same level as that of Minister for Finance [about €250,000], as we previously proposed when the Bank Guarantee legislation was brought before Dail last October," said the party's finance spokeswoman Joan Burton.
As with any other shareholder, large or small, the 10 businessmen who were loaned the money can avail of tax benefits on any loss they crystallise from a share investment.
Incentive
These rules are in place to act as an incentive for people to invest in corporations listed on the stock market.
If a person makes a loss on one investment, they can write off part of the loss made against income generated from the sale of property, shares and other assets. Investors normally have to crystallise a loss (sell the shares at below the value they were bought for) before claiming tax relief.
But in cases where stock has effectively become worthless, or where the company in which the stock is owned has failed, investors can secure tax relief in some circumstances, even if they still own the stock.
- John Mulligan
