Equitable Life Compensation should be tax free – McGuinness urges Finance Minister to grant exemption
Mairead McGuinness MEP and Vice-President of the European Parliament who led the Europe Parliament’s investigation into the demise of the UK based company, Equitable Life, has expressed deep disappointment that the Minister for Finance has not responded favourably to her call for a tax exemption on compensation payments made to Irish citizens following the collapse of the UK Equitable Life Company.
“These are partial compensation payments coming very late in the day following years of campaigning. Unlike their UK neighbours Irish policy holders of Equitable Life will have the compensation payments taxed,” she said.The Equitable Life Payment Scheme was set up by the UK Government to compensate Equitable Life policyholders who incurred losses due to regulatory failure in the UK. UK compensation payments under this scheme are tax free. However, some Irish recipients, who are predominantly elderly, will be taxed on their payments.
“The Minister for Finance, Michael Noonan, has said that no exception will be made for these citizens,” McGuinness said.
“Minister Noonan has informed me that there are no similar exemptions under Irish tax law to the various specified exemptions from UK tax that have been provided in respect of the compensation payments made under the Scheme and he does not propose to provide for such specific exemptions under Irish tax law.
“I am deeply disappointed for those affected Equitable Life policy holders who had to endure the stress of the collapse of the company and now when some compensation is on the horizon, due to a 10 year campaign I led at EU level to have Irish citizens affected included in the compensation scheme, they will lose out on part of the money owed to them simply because they live in the Irish jurisdiction. It seems wholly unfair.”
McGuinness has reiterated her call for the government to exempt Irish recipients of compensation payments from the Equitable Life scheme from tax so they may receive their entire compensation payment.