A seminar at the Temple Gate Hotel in Ennis at the weekend heard how Government tax breaks for land development are now driving dozens of developers into personal bankruptcy, with devastating effects.Brian McEnery, President of the Association of Chartered Certified Accountants (ACCA), said no previous recession had produced such a huge overlap between personal insolvency and corporate insolvency, reports the Irish Independent. The reason was the large amount of personal guarantees given to back loans drawn down by companies.
A factor behind the growing number of personal insolvencies is government tax legislation that gave a special income tax rate for land development activities. "To avail of the special tax rate, you had to do the land activity in your own name. As a consequence, a lot of the developers bought land in their own names, whereas they have previously bought it as a company."
He told the seminar that the banks were now starting to put serious pressure on individuals.
