Under the new regulations, Irish residents who are recipients of offshore funds will be liable for gift tax. Critics have already noted that this will also affect many Irish emigrants' remittances to their elderly parents in Ireland.

The new regulations close off the tax loophole that allowed Charles Haughey to receive over £1.3 million tax free from the Ansbacher account held for him in the Cayman Islands by taking advantage of the old rules which allowed children abroad to send money home to their parents in Ireland without incurring a tax liability.

Because of the complex structure of companies and trusts used in the Ansbacher scheme, it has been almost impossible for Irish investigators to trace the money, a fact borne out when Mr Haughey won an appeal to a Tax Commissioner last year when he argued that he should not have to pay tax on the £1.3m in question. The Revenue Commissioners have appealed this decision to the Circuit Court but no date has been set for the hearing.