Mr Don Reid, a former tax partner with Stokes Kennedy Crowley, told the tribunal yesterday that he had not been consulted, nor had he offered advice, on a bridging loan advanced by Guinness & Mahon to Mr Peter Sutherland in 1976.
The tribunal was shown documents relating to the loan in which Mr Reid was mentioned, among them a bank memorandum, dated June 23rd 1977, which suggested that Mr Sutherland was due to make contact with Mr Reid regarding the loan.
However, Mr Reid said he had no recollection of any meeting or discussions with the former attorney general regarding the loan from June 7th, 1977 onwards, nor had he on any occasion acted in relation to the matter.
Neither could he in retrospect think of any advice which might have been expected of him other than perhaps advice relating to the tax deductibility of interest on the loan if paid in one sum.
Mr Reid said his involvement with Mr Sutherland stemmed from his role as a tax adviser to Guinness & Mahon and a connection between the late Mr Ru Leonard, the bank's head of accounts, and Mr Sutherland.
He said that he was occasionally asked by the bank to offer general advice on client affairs and that Mr Leonard had consulted him as to the nature of the arrangement which might best suit Mr Sutherland's father-in-law on the matter of establishing a family trust. He believed he had agreed with, or recommended, the use of a discretionary settlement, and that the trust should be located in a low-tax, offshore jurisdiction.
His understanding was that Spain, where Mr Sutherland's father-in-law resided, did not have a discretionary trust regime and that location in Ireland might have given rise to double taxation, as there was no suitable arrangement at that time between the two countries for the relief of double taxation.
Hence, his advice was to select a low-tax or nil-tax jurisdiction, so that taxation on the trust would be neutral, leaving the question of liability, if any, to be dealt with in accordance with the tax regime in which the recipients were resident.
He had no recollection of seeing the deed of trust, but said that he did advise the bank on the need to get a clear statement of wishes from the relevant party.
Mr Reid said that he had had no direct involvement in the formation of the trust. Asked what action he would have taken if Mr Sutherland had sought advice on whether the trust funds could have provided backing security for borrowings, he replied that he might have answered in a general way that this was possible.
However, he would have been "hesitant" to give specific advice before first studying the deed of trust and letter of wishes in detail. He said that he would have remembered studying any such documents, adding that it might even have provoked a fee, and there was no record of any such fee.
It was noted that Mr Reid subsequently became employed as Mr Sutherland's tax adviser in the late 1980s for about four to five years.
The tribunal resumes next Thursday.
