The Revenue Commissioners entered into negotiations with Mr Charles Haughey in relation to taxes due arising from the payments described in the McCracken Report, determined not to settle for less than £1 million.
The chairman of the Revenue, Mr Dermot Quigley, told the tribunal that as part of the settlement agreement, signed on April 3rd, 2000, Mr Haughey was to pay simple interest at 1 per cent per month from September 1st, 2000, if the money had not been paid by that date.
The delay was agreed to allow for the disposal of family assets which would be used to pay the £1,009,435 tax bill. The debt was paid on August 30th, 2000. It represented 100 per cent of the tax and almost 100 per cent interest.
The accumulation of interest on Mr Haughey's debt had stopped when assessments were issued in December 1997. The legislation governing capital acquisitions tax, or gift tax, allows the Revenue to cap total interest at 100 per cent "and that is what we did".
The settlement was agreed the day before the case was to be heard in the Circuit Court. The settlement had the added benefit of including an agreement as to how the debt would be paid.
Mr Quigley agreed with Mr John Coughlan SC, for the tribunal, that between December 1997 and August 2000 there was no increase in the money due from Mr Haughey.
However, he agreed with the chairman, Mr Justice Moriarty, that the Revenue wanted time to prepare for the Circuit Court case following the decision by the Appeal Commissioner in December 1998 in Mr Haughey's favour.
