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Haughey to pay £1 million

By Andrew Bushe

DUBLIN -- Former Taoiseach Charles Haughey has agreed to sell unspecified family assets and pay more than a million punts in back taxes for gifts he received from Ben Dunne between 1987 and 1991, the Revenue Commissioners have announced.

The settlement follows approaches late last year from Haughey's "agents."

A judicial tribunal established in 1997 that Haughey received £1.3 million from the then department store boss.

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As a result, the Revenue Commissioners served him with a tax bill of £1.165 million.

There was a major row in the Dail in December 1998 when it emerged Haughey had appealed the tax assessment to the independent Appeal Commissioners and the bill was reduced to zero. The commissioner involved was a brother-in-law of Taoiseach Bertie Ahern.

For gift tax to be payable under capital taxation law, the precise identity of the person who gave the gift and the "domicile of the assets" must be established.

Several of the payments from Dunne had been channeled through offshore companies in the Isle of Man, Switzerland and Hong Kong.

The Revenue Commissioners were due to begin an appeal against that the appeal commissioner's decision in the Dublin Circuit Court last Tuesday, April 4. The settlement means the court case will not go ahead.

The former taoiseach will pay £1,009,435. This includes gift tax of £507,663 and interest amounting to almost 100 percent of that tax. There are no penalties involved in the settlement.

Haughey has given undertakings to the Revenue to sell family assets to meet the tax bill and to pay it before Oct. 1.

"It has no application to, or implications for, any other tax liabilities that exist or may arise," a statement from the Revenue Commissioners said.

Haughey's finances are currently being investigated by another judicial tribunal. It has heard evidence he received further payments from Dunne as well as money from other leading business figures.

Revenue chairman Dermot Quigley described the settlement as a "satisfactory outcome to a very difficult and complex case."

Quigley refused to disclose what family assets Haughey is selling. "I wouldn't like to go into that at this stage."

It has been reported that a property in Sligo it being sold, but it alone would be insufficient.

There has been speculation that a number of wealthy friends are willing to help Haughey meet the bill. However, further gifts could lead to an additional tax liability.

The original Dunne payments followed an approach from Haughey's late accountant, Des Traynor, in the 1980s.

He told Dunne he was seeking to put together a consortium of about half a dozen people to contribute £150,000 each to deal with a "significant problem, a business problem" related to Haughey.

Dunne told Traynor, "I think Haughey is making a huge mistake trying to get six or seven people together. . . . Christ picked 12 apostles and one of them crucified him." Dunne agreed to pay the entire amount himself.

Haughey was taoiseach on three occasions in the 1980s and early 1990s and resigned in February 1992. He is facing charges of obstructing and hindering the McCracken Tribunal, which established he received the Dunnes gifts.