Irish Pull Money Out Of Isle Of Man As Tax Man Tightens The Screws

by Jason Gorringe, Tax-News.com, London

10 May 2006

Irish residents have reportedly withdrawn hundreds of millions of euros held on deposit with Irish banks in the Isle of Man in recent months in the wake of the Irish Revenue Commission's campaign against offshore tax evasion, according to a report by Ireland's Sunday Business Post.

Figures seen by the newspaper show that the amount of money held on deposit in the Isle of Man by individuals resident in Ireland has halved from EUR600 million to EUR300 million in the past year alone, and fallen from almost EUR1 billion in the last six years.

Isle of Man government officials have reportedly expressed the view that the dramatic fall in these deposits is linked to the aggressive pursuit of tax evaders, especially those holding bank accounts offshore, by the Irish tax authorities in recent years.

The recent ruling by HM Customs and Revenue, the UK tax authority, in the case against Barclays offshore account holders could also influence many more Isle of Man account holders to pull money out of the jurisdiction, IoM officials told the newspaper.

In a ruling handed down by Special Commissioner John Avery Jones last Wednesday, Barclays Bank was ordered to furnish HM Revenue and Customs with details of offshore accounts held by its customers, in order to assist the tax authority in clamping down on tax evasion.

Although the ruling concerned information held only by Barclays, HM Revenue and Customs is now expected to pursue other financial institutions for customer data.

Last October, Chairman of the Irish Revenue Commissioners, Frank Daly, told a parliamentary committee that The Revenue's Offshore Assets Investigation had by that point brought in additional revenues of EUR769.5 million. In total, the special investigations into serious tax evasion, such as Ansbacher accounts, bogus non-resident accounts and offshore holdings, had yielded additional tax revenues in excess of EUR2.1 billion, Daly stated.

The Isle of Man is not the only offshore jurisdiction to have been targeted by the Revenue Commissioners. One of the starting points of the offshore investigation related to trusts based in Jersey, and Mr Daly told committee members that 254 individuals had come forward to make voluntary declarations relating to Jersey trusts.

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