A tax loophole on interest paid by individuals on money borrowed to buy a stake in or lend money to a company was today closed by the Minister of Finance, Mr Charlie McCreevy.
In January, Mr McCreevy signalled the closure of a related loophole in regard to the transfer of capital allowances on buildings from companies to individual investors.
According to the Department of Finance, there had been a mismatch in such situations between the low rate of corporation tax paid by the company on the clawback of capital allowances and the higher income tax rate against which individual investors paid.
Section 13 of the Finance Bill 2003, as passed by the Dail, closed off this loophole.
However, the Minster said today that it had come to his attention that arrangements were being considered, "the effect of which would be to circumvent the Finance Bill restriction".
Mr McCreevy said he was acting immediately to close off "these contrived arrangements".
"This measure, which will be effective on and from today, will be contained in the Budget/Finance Bill 2004," he added.
