'What fresh hell is this?' - Plan to tax 'bank of mum and dad' loans sparked raft of complaints
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Finance Minister Paschal Donohoe was hit with a wave of complaints over proposals to tax loans from the so-called 'bank of mum and dad'.
The Department of Finance had said before the budget it planned to tackle inter-family loans by linking them to the best interest rate somebody could have secured from a financial institution. However, the change was withdrawn at the eleventh hour with Mr Donohoe saying it had the potential to “create inconsistencies”.
Records from the Department of Finance detail a flurry of correspondence to the minister from members of the public and government colleagues late last year.
Fianna Fáil Senator Timmy Dooley said he had been contacted by “some concerned constituents” about the proposed changes forwarding what he said was “sample correspondence”.
One letter said: “I would have thought that if parents are in a position to assist their children to obtain a home, then that would relieve the Government of its obligation to assist people seeking to house themselves.
“These parents, who are now in their 'twilight' years, have worked all their lives and paid their taxes, but now this money will be taxed once again.”
The office of Fine Gael colleague TD Neale Richmond also wrote seeking clarification on what was intended.
An email from the office said: “I wouldn’t be too familiar with this and I’m wondering if you could look into it for us? Would there be a possibility of this being eased in or something of that sort?”
Multiple representations were also received from the public, with one saying: “Minister, in the name of all that is just and reasonable, what fresh hell is this?!
Another wrote of how they wanted to help their son and that whatever money they had saved came from “getting up early in the morning and working hard”.
They said: “On the political side ye will be shooting yourselves in both feet with [the] grey-haired segment of society and Fianna Fáil and Fine Gael will be on the opposition benches.
“I don’t fancy voting for Sinn Féin so will have to go for the Independent candidates.”
A spokeswoman for the Department of Finance said: “The Minister believed greater consideration needed to be given to the proposal. For instance, it was pointed out to him that the proposed drafting had the potential to create inconsistencies as to how it would be applied, with the potential for variation in rates being used.
“In summary, the Minister concluded that the issue was complex and that more time needed to be given to determining whether this change was warranted in the first place, and if it is, to decide on how this issue can be appropriately addressed.”
The spokeswoman said inter-family loans would now be considered by officials from the department and Revenue with a view to recommendations later in the year for consideration by the minister.