The Revenue Commissioners have told the Bank of Ireland that some of its wealthiest customers, who evaded taxes using offshore trusts, will be entitled to "significant benefits" if they pay their dues by the end of May.
The bank has written to about 400 individuals who are customers of its branch in Jersey to warn them that the Revenue will begin to investigate their affairs at the start of June and to highlight the reduced penalties available to them.
In the letter, seen by The Irish Times, customers were told their penalties could be reduced from around 100 per cent to between 3 per cent and 10 per cent of their total tax liabilities if they make a voluntary disclosure of their affairs to the Revenue by May 31st. They will not be prosecuted, and their names and details of their tax settlements will not be published in the Revenue's list of tax defaulters, according to the letter.
A Bank of Ireland spokesman rejected any suggestion that its clients had secured a type of amnesty deal with the Revenue. "We knew the Irish Revenue was shaping up to look at this and have been in discussion with them. There is no reason to believe that people have a liability, but we believed they were entitled to be told about the investigation," he said.
A Revenue spokesman said it was "unusual" for individuals to be tipped off to settle their affairs ahead of an investigation. He added that these terms were made available to any taxpayer wishing to make a voluntary disclosure since September 2002. The Bank of Ireland refused to speculate on how much money belonging to Irish customers might be held in Jersey. Tax practitioners suggest individuals would need to have a minimum of about €250,000 to justify establishing a trust, and some sources believe there may be many millions of euro held in the Bank of Ireland Trust Company (Jersey) Ltd.
One tax adviser described the pre-emptive strike by the Revenue in conjunction with the bank as a "peculiar interpretation" of its (Revenue's) practices. "If you have a trust and have financial trouble this is a very good deal," the source said.
The Bank of Ireland's Jersey branch was investigated by the UK Revenue in recent months seeking details about individuals registered for tax in Britain who may have sheltered income there.
This investigation is being carried out by the Revenue's Offshore Assets Group which has been involved in the inquiry into the Ansbacher deposits.