How Rohan saved £1.5m in art tax
Sunday May 16 1999
The proposal to make the law retrospective by 12 years came from the Revenue Commissioners, and not the Department of Finance which was then headed by Bertie Ahern, it can also be revealed.
Its introduction by Mr Ahern, when he was Minister for Finance, followed lobbying by the Irish Georgian Society, the National Heritage Council, Bord Fáilte and Mr Rohan himself.
This lobbying intensified following an application by Mr Rohan to the Director of the National Gallery for a licence to export his priceless art collection to the UK.
Extensive correspondence obtained by the Sunday Independent also reveals there were real fears among cultural bodies that if Mr Ahern did not introduce the amending legislation, it would lead to the widespread exportation of valuable works of art.
In a letter dated February 10, 1993, the Irish Georgian Society told Mr Ahern: ``Priceless and irreplaceable works will no longer be on view and many would undoubtedly be sold abroad. This would be a great loss to our national heritage.''
The Fianna Fáil/Labour coalition was in power when the amending Section 19 legislation was introduced in the 1994 Finance Act.
The decision was collectively taken at government level.
Also in February 1993 a day earlier than the Irish Georgian Society's letter the Arts and Culture Division in Minister Higgins's department wrote to the Department of Finance stating it would ``look favourably'' upon Mr Rohan's request that the amending legislation be considered.
Following an approach from Mr Rohan, owner of Charleville House, Enniskerry, Co Wicklow, Nuala Turner of the Arts and Culture Division wrote: ``The Revenue has decided that he should be charged benefit-in-kind on works of art at Charleville.
``He feels that the benefit-in-kind assessed by the Revenue is at such an intolerable level that no individual will make available their house for such storage and could also deter new purchases and indeed to ensure the disposal of collections.
``Mr Rohan is anxious that amending legislation could be considered, and encloses attached appendix. We would look favourably upon his request.''
This letter was written three months before the Revenue Appeals Commissioners upheld Mr Rohan's appeal against a Revenue benefit-in-kind assessment.
The Revenue Commissioners were planning to test that decision in the courts when it was overtaken by the new legislation introduced by Mr Ahern.
Its introduction is estimated to have saved Mr Rohan £1.5m in tax at the time, and between £150,000 and £180,000 a year thereafter.
But it is now also clear the new law prevented the possible loss to the country of works of art worth many times that.
According to a government spokesman: ``It is wrong to suggest that the only beneficiary was one taxpayer. The beneficiary was the public, who had the opportunity to view an important art collection retained in the country.''
In the process of formulating that legislation, it was the Revenue Commissioners who proposed that it should be made 12 years retrospective.
A government spokesman explained the reason Revenue proposed retrospection was to make it ``consistent with the period over which the relief mentioned applied''.
This was confirmed by a spokesman for the Revenue Commissioners last week.
As well as the Irish Georgian Society, Mr Ahern and Mr Higgins were also lobbied by the late Lord Killanin, chairman of the National Heritage Council and Matt McNulty, former Director General of Bord Fáilte.
- JODY CORCORAN
