J.M. Burke Tax Solicitors Ashley House, Morehampton Road ...

Irish Broker Magazine 

Single Premium Insurance Policies – Revenue Investigation moves to next phase 

Tax enquiry letters to issue from Revenue to approximately 5,000 policy holders 

on 30 March 2007 

Pat O’Sullivan, Director – Financial Services with the IBA talks to Julie Burke, J. M. 

Burke Tax Solicitors, about the current situation for consumers affected by the 

Revenue Commissioners Single Premium Investigation. Julie is a Tax Solicitor whose 

practice is unique in Ireland as it specialises in negotiating, advising and preparing 

computations for settlements with Revenue. She has represented many consumers 

who have unpaid tax issues including many families who have inherited a tax problem 

or those who do not have enough money to fund the unpaid tax liabilities, interest and 

penalties or those who are being prosecuted by Revenue for tax offences. 

Julie, thank you for taking the time to help us understand the next phase of the 

Revenue investigation into Single Premium Insurance Policies which is due to 

commence shortly. In particular, we are interested in the current situation and your 

views on the various questions and concerns that clients of intermediaries may raise. 

Question 1: Bring us back a couple of years Julie and tell us when and why the 

investigation into Single Premium Funds was instigated by the Revenue 

Commissioners? 

In 2005 Revenue introduced a special scheme of voluntary disclosure for those who 

may have had life policies (where €20,000 or more was invested) which were funded 

by untaxed or hot money. 

J.M. Burke Tax Solicitors 

Ashley House, Morehampton Road, Donnybrook, Dublin 4 

Telephone: +353 -1-4404420 Fax: +353- 1-4430499 

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Question 2: How many people availed of the voluntary disclosure scheme in 

2005? 

Revenue have confirmed that approximately 5,000 taxpayers made voluntary 

disclosures under the scheme i.e. paid tax, interest and penalties and a further 5,000 

indicated that they had no outstanding tax liability. 

Question 3: What was the next step taken by Revenue? 

During 2006, most insurance companies handed over information under High Court 

Orders obtained by Revenue regarding all policy holders who had single premium 

type policies taken out between 1990 and 2003 where the amount invested in all 

policies was greater than €50,000. 

Question 4: How many policies were involved? 

I understand that information regarding approximately 80,000 policies was provided 

to Revenue, on average each policy holder has 2 or 3 policies. 

Question 5: What happens next to a policy holder who has not made a voluntary 

disclosure or completed a declaration sent by the insurance companies or written 

to Revenue? 

A letter will issue shortly from Revenue to approximately 5,000 policyholders from 

whom they have not heard offering a last chance to those who have a tax problem in 

relation to monies used or invested in life policies to come forward. 

Question 6: Do you know what the proposed tax enquiry letter will say? 

The letter will state as follows. 



Telephone: +353 -1-4404420 Fax: +353- 1-4430499 

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“The Revenue Commissioners are conducting an investigation into the possible use of 

Single Premium Investment Policies for the purposes of tax evasion. The Revenue 

Commissioners have received information that you invested in such a policy and 

accordingly ask that you now address, as a matter of urgency, the question of whether 

you have any undeclared tax liabilities.” 

Question 7: Will Revenue have information regarding those who sold policies? 

Revenue have indicated in the tax enquiry letter that information should be submitted 

regarding where the policy was purchased (i.e. direct from the company or through an 

intermediary or from a broker). 

Question 8: What benefits are specified in the tax enquiry letter for those who 

come forward by 30 th May 2007 ? 

Revenue is offering a reduced penalty of 75% of the unpaid tax and there will be no 

criminal prosecution as long as a full disclosure and payment made by 30 th May. 

Question 9: What will happen if a policyholder has ignored Revenue to date and 

fails to reply to this latest tax enquiry letter by 30 th May 2007? 

Revenue have received all policy holder information and will be able to determine 

those who have not responded. They can expect unfavourable treatment from 

Revenue in the context of any settlement of outstanding tax liabilities including 

penalties of 100% of underpaid tax. Follow up action is likely to involve investigation 

of all of their tax affairs and a possible criminal prosecution. 

Question 10: What is the position if you do not receive a tax enquiry letter in this 

phase of the investigation? 



Telephone: +353 -1-4404420 Fax: +353- 1-4430499 

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There are 2 further phases of the investigation planned for later in 2007. Even if a 

policy holder does not receive a tax enquiry letter in this phase of the investigation, 

he/she may hear from Revenue in the follow up phases which are planned. 

Question 11: What should a policy holder do who has a tax issue in relation to 

monies invested? 

This is his/her last opportunity to pay unpaid tax interest and reduced penalties (from 

1991) by the 30 th of May 2007 to Revenue. His or her name will be published on the 

list of tax defaulters if the amount paid exceeds €12,700 but will not be investigated 

with a view to criminal prosecution provided the disclosure is full, accurate and 

complete. 

Question 12: What if the policy holder has no tax problem but simply did not get 

in touch with Revenue by making a voluntary disclosure or completing a nil 

declaration or writing to Revenue? 

He or she should now write to Revenue confirming that the policy was funded from 

monies where full tax has been paid i.e. income tax, capital gains tax or inheritance 

tax. This will eliminate the tax payer from further investigation provided the 

information is correct. 

Question 13: What are the pitfalls of completing an incorrect declaration? 

No taxpayer should sign a declaration unless they have carried out a full review of all 

tax affairs (not simply in relation to the policy). The standard form declarations issued 

by Revenue relate to all of a policy holder’s tax affairs, not solely the funds used to 

invest in the policy. 



Telephone: +353 -1-4404420 Fax: +353- 1-4430499 

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Please note that if there is any material error or omission in a declaration made, the 

individual may be the subject of a Revenue investigation in relation to all of his or her 

tax affairs and the incorrect declaration may be used in a subsequent criminal 

prosecution. 

Question 14: What can you do to help policy holders who have not contacted 

Revenue to date and need assistance at this point? 

Since the beginning of these type of investigations 8 years ago by Revenue, I have 

assisted a number of tax payers who have made settlements with Revenue in relation 

to bogus non resident accounts, offshore accounts, N.I.B. and Ansbacher, particularly 

those who are unsure of their legal position where they may have inherited policies on 

the death of a parent or relative. 

Question 15: What can you do for a policy holder who cannot afford to pay the 

bill for unpaid tax, interest and penalties? 

I have assisted in a number of cases where there is genuine hardship i.e. there is little 

funds available and the only asset is the family home. A case for reduced payment can 

be made on the grounds of hardship if a policy holder comes forward. There will be 

little sympathy from Revenue if a policy holder does not avail of his/her last chance 

even if on medical or hardship grounds. 

I believe that it is inevitable that Revenue will have received information regarding 

every policy holder. It is my strong view based on over 20 years experience that there 

is no point in holding back at this point. 

Question 16: What role can brokers/intermediaries play to assist any clients that 

may be affected? 



Telephone: +353 -1-4404420 Fax: +353- 1-4430499 

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It is important that they advise their customers to seek proper advice from a 

practitioner who has experience of dealing with these type of cases if they have not 

already approached Revenue to date. There will be no more chances. Remember that 

brokers and intermediaries who help clients to continue to evade tax could potentially 

be prosecuted for aiding and abetting themselves. 

If you have any queries Julie Burke may be contacted by telephone on 01- 

4404420 or by email at jburke@jmburketaxsolicitors.com 



Telephone: +353 -1-4404420 Fax: +353- 1-4430499 

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J.M. Burke Tax Solicitors Ashley House, Morehampton Road ...

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