Angela Fleming features in The Irish Times
10 October 2019
Angela Fleming, Tax Partner, reacts to the announcement that the government will introduce a 50% debt limit on overseas funds and 1.25:1 property income to finance costs in order to limit the extent to which funds can use interest payment to limit taxable distributions.
Minister Paschal Donohoe was prompted to impose the limit to prevent what he described as "aggressive" tax avoidance. The move by the Minister on Irish real-estate funds (IREFs) has drawn criticism from some key stakeholders in the property industry. Angela comments that "certainty must be a key cornerstone of any tax system, particularly one focused on attracting inward investment". She also notes that the IREF changes had not been subject to a "full and proper consultation".
"The speed at which these changes have been introduced, coupled with the overnight increase in stamp duty on commercial property (from 6% to 7.5%), I think, does not send the right signal to institutional investors that their participation in the market is welcome and encouraged," said Angela.
Content adapted from The Irish Times: "Vulture funds loaded IREFs with 90% debt to sidestep withholding tax"