Businessman Gerry McCaughey is to stand down as chairman of the Dublin Docklands Development Authority (DDDA) following reports relating to the sale of Century Homes.
Mr McCaughey's Century Homes business was acquired by Kingspan for €67 million in 2005. He, and three other shareholders, were advised they could benefit from not paying 20 per cent capital gains tax on the transaction if their spouses lived in Italy for a year.
Mr McCaughey said the transaction was perfectly legal, and that if there was any tax treatment it was done within the law and would have been the on best tax advice available.
Speaking to RTÉ, Mr McCaughey said he did not want politicians to become distracted by an issue "as minor as this".
When questioned in the Dáil about the issue, Taoiseach Brian Cowen said he could not comment for legal reasons on the arrangements made by Mr McCaughey to reduce his tax liability. These arrangements involved the use of a legal tax loophole.
Earlier today, Joan Burton, Labour spokeswoman on finance, said taxpayers would have "listened with astonishment" to the details surrounding the arrangements.
"I have no doubt that Mr. McCaughey acted legally and on the basis of the best and most expensive advice available to him, but this disclosure will incense ordinary PAYE workers, who already pay 41per cent on any earning over and above the average industrial wage and who now face increased tax rates and levies in the budget," she said.
Mr McCaughey was appointed chairman of the DDDA by Minister for the Environment John Gormley.
Mr Gormley tonight said he spoke by telephone to Mr McCaughey, who is in the United States, and insisted that he accepted Mr McCaughey’s assurances that he acted in good faith at all times.
“In his short few weeks as chairman he impressed people with the interest, dynamism and enthusiasm he brought to the role of chairman,” said Mr Gormley.
“His appointment was widely welcomed, including by politicians of various political backgrounds, and his competence to take on the major challenges which came with the job was never called into question,” said Mr Gormley.
“I spoke to Mr McCaughey on phone this evening. He impressed upon me that he had broken no law and acted at all times in good faith. I fully accept that, as I have found him to be a sincere and honest person.
“I would like to thank him sincerely for the contribution he made and the commitment he showed in taking on this challenging role.”
Additional reporting PA