Monday 20 November 2017

Loopholes over art or 'digs' no longer available to executives

Fionnan Sheahan

Fionnan Sheahan

A WEALTHY businessman who got his company to buy art for his own use is a factor behind a tax clampdown.

Executives who use art purchased by their company will now have to pay benefit-in-kind (BIK) tax, under a change in the Finance Bill. BIK is the tax payable on company perks.

It is understood that one particular case, involving a wealthy businessman purchasing art through his company for tax purposes, came to the attention of the authorities.

But executives will now have to pay for the privilege of having fine art at their disposal.

The abuse of the rent-a-room scheme is also prompting another loophole to be closed off.

The scheme is intended to encourage student accommodation or 'digs' to be provided in homes.

But it was being abused by companies who were getting the relief for executives to officially make a room available occasionally for visiting clients.

Executives were effectively getting a €5,000 tax-free bonus.

This loophole is now being closed off.

The Department of Finance said the scheme was being amended to deny the tax relief in cases where payments were made by companies to an office holder or an employee for the purposes of the use of a room in the office holder's or employee's principle private residence on an occasional basis by clients of the company.

Irish Independent

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