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The Revenue expect to net €2bn from their Life Assurance investigation to being on 23^rd May 2005. The Revenue will initially focus on people who invested €20,000 or more of a lump sum of undeclared money into these policies, which contain a small element of life cover with the balance been invested by fund manager in a wide range of nominated investments. The Revenue have announced a disclosure scheme whereby the notice of intention to disclose must be completed and submitted by 23 May 2005 and the disclosure, payment calculation, details of sources of previously undeclared liability and payment must be made by 22 July 2005.

The benefits of making such a disclosure are:

• the identify of the person involved and the details of the payment to the Revenue will not be disclosed
• Revenue will not take steps to initiate the prosecution of any offence that my have been committed by the taxpayer, in relation to the disclosure
• Penalties will be reduced from 100% to 10% in certain instances.

You will not qualify for the disclosure scheme if you were:

• Holder of a Bogus Non-Resident Account
• Subject to an Ansbacher and NIB/CMI enquiry cast
• Person who previously made a disclosure in relation to an offshore financial product
• Person who was subject to investigation arising from the Moriarty or Flood/Mahon tribunals

The Revenue will not calculation the liability for you, but will not invalidate the benefit of the disclosure because of insignificant calculation errors. With regards to Income Tax, liabilities in relation to undisclosed income for years prior to 1990/91 may be calculated on the basis that this undisclosed arose in tax year 1990/91. With regards to VAT the liability for all taxable periods up to and including January/February 1991 may be calculated on the basis that the taxable supply occurred in the January/February 1991 period.

If Joe had undisclosed income of £25,000 including VAT in the tax year 1990/91 which he invested in a Life Assurance Policy. His VAT liability at 23% would be £4,675. Tax and levies at the top rate would be due in euros €13,936, statutory interest at 197% would be €27,453.94, rate of penalty 100% €13,936.01, post 1990/91 this will be reduced to 10%, total due on the income tax liability €55325.96. The VAT would also incur statutory interest at 197% would be €11,694, a penalty of €5,936, as well as VAT due of 5,936, bring the overall total liability to €78,892.

Jane sold shares on 12 November 2001 and made a gain of £20,000 this would leave her with a taxable gain after her exemption of £19,000. The Euro equivalent of her tax would be €24,125, interest would be €10,374, penalty at 10% of €2,412.50 leaving a total due of €36,911.

If you have invested monies in one of these policies you should contact your tax advisor immediately and regularise you affairs. The Revenue have the obtain information from financial institutions and as we have learned from the bogus non residents accounts and other investigation they will pursue, prosecute and name and shame offenders.