University of Limerick is seeking Revenue mitigation from interest and any penalties on a €1 million tax bill, after buying 20 student homes in the mistaken belief that the deal was exempt from stamp duty.
A confidential report on the affair separately raised questions over post-deal advice from accountants PricewaterhouseCoopers (PwC), auditors to UL’s governing body. The report by former civil servant Niamh O’Donoghue said PwC did not correct “incomplete” advice when UL clarified a question on stamp duty, with months passing before the liability became clear.
Stamp duty mistakes compounded problems with the August 2022 housing deal. UL president Prof Kerstin Mey has been on sick leave since March, after acknowledging the university overpaid €5.2 million for the homes.
The university paid a €1,007,866 stamp duty bill three months ago, after its claim for an exemption on grounds of its charitable status was dismissed.
Joy is a word Conor McGregor returns to again and again. Nikita Hand paints a much darker picture
Blindboy: ‘I left my first day of school feeling great shame. The pain of that still rises up in me’
Not quite back to basics for Ireland but amazing 1950s throwback goal lightens the mood
Election 2024 poll: Support for Independents jumps but Fine Gael remains most popular party
UL failed to take account of new tax measures in 2021 when the Government imposed stamp duty on the bulk purchase of 10 or more homes, to prevent investment funds buying multiple properties.
A note for the Dáil Public Accounts Committee said the plea for Revenue mitigation was made for Plassey Trust Company (PTC), the campus accommodation provider.
“A submission in relation to mitigating interest and any penalties was made to Revenue by PwC on behalf of PTC on February 23rd, 2024, and a response from Revenue is awaited,” the note said.
Revenue had no comment. UL said it had “nothing to add” to a hearing last week at the Dáil committee, while PwC did not respond to a request for comment.
It was the stamp duty issue that prompted UL to seek a review of the housing deal from Ms O’Donoghue, former head of the Department of Social Protection. Her report, published in March, said stamp duty was first raised in a February 2022 memo from UL’s solicitor to the chief corporate officer and chief financial and performance officer.
While it was asserted that “stamp duty does not arise for this acquisition” because of UL’s charitable status, Ms O’Donoghue said that was not confirmed then or before the deal went for approval.
[ Costly UL houses ‘unauthorised’ for students, Limerick planners sayOpens in new window ]
A note that same day from the director for buildings and estates said UL should seek “specific advice” on stamp duty: “There is no evidence that the suggestion was followed up at the time.”
The stamp duty issue did not arise again until August 2023 when a “very short query” was raised with PwC seeking confirmation of a charitable status exemption.
“The response to this query, unfortunately, is incomplete insofar as it did not refer to the removal of the exemption (in 2021) where the acquisition related to 10 or more residential units,” she said.
“The incomplete nature of the response is somewhat explained because the query raised did not outline the nature of the intended purchase (20 houses). However, when this was clarified later, the advice which had been initially provided was not corrected. This meant that the liability to stamp duty did not become apparent until some months later.”
- Sign up for push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Listen to our Inside Politics podcast for the best political chat and analysis
