Tax-free Capital Gains for Mary?

1 November, 2016

Adrian Bourke, the brother of ex-president Mary Robinson, will presumably make a nice capital gain from the sale of his Ballina premises to Mayo County Council.  It’s supposed to be bought for €665,000 and be used as Ireland’s first presidential library, housing his sister’s papers.  However  recent reports suggest that the sale has stalled for reasons unknown.

In fact the whole project has come under fire recently, with RTE’s Prime Time last week raising various questions about whether this is a good use of public money, and historian Diarmuid Ferriter writing “If Robinson wants to encourage research into her career, or assessments of her legacy, she should follow the practice of her predecessors and donate her papers to the National Library, the National Archives or one of the national universities, without any need for tax credits or valuations by auctioneers and with no excessively expensive, publicly funded vanity centre.”  Ouch.

And Michael McDowell has raised similar concerns in his most recent Sunday Business Post contribution:  “Are all former office-holders to benefit by tax holidays based on donating their papers, documents and memorabilia to publicly funded ‘libraries’ in future? Or is this to be a one-off?   In my judgment, the Ballina scheme should be called off before it does further damage to Irish public life. And before it needlessly damages the presidency – not to mention damage to her own place in our history.”  Double ouch.

I’m tempted to ask why it has taken so long for these worthies to train their gaze on this project, which is being funded by the public purse to the tune of about €5 million.  Yours truly was a lot quicker into the fray, asking a few pertinent questions 11 months ago.

Mrs Robinson has also been in the news recently as she is selling her home in Mayo. The plug for the house in the Irish Times reveals that “Former president Mary Robinson and husband Nick are selling their Co Mayo home for €2.75 million. Massbrook, a 113 acre estate on the shores of Lough Conn, is located about 20 minutes from Mrs Robinson’s childhood home of Ballina, and has served as the couple’s primary Irish base since they purchased it in 1994.”

Those of you who (unlike me) are familiar with tax matters will be aware that the sale of one’s principal private residence is exempt from Capital Gains Tax (CGT).  However, the relevant legislation, section 604 of the Taxes Consolidation Act 1997, provides that the exemption only applies to the residence plus its “garden or grounds up to an area (exclusive of the site of the dwelling house) not exceeding one acre“, so Mrs Robinson is presumably looking at a CGT bill, calculated at 33% of any gain she and her husband make on 112 of the 113 acres.  Based on an apportionment of the sale price being asked, I’m guessing that the gain might be in excess of €1 million, since the 1994 purchase price allowed as an offset would have been quite small.

However as the State has given her a tax credit of €2 million for “donating” her archive, she will not have to worry about handing over any of the sale proceeds to the Revenue Commissioners.  She will also presumably have plenty of tax credit left over to cover other tax liabilities – such as her Presidential pension, for instance?  On the other hand, wouldn’t it be great if she could let her brother share in the tax credit, so as to cover the profit he will make on the sale of his premises in Ballina?

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: