Brian Cowen (Laois-Offaly, Fianna Fail)

The assumption was that when ARFs were initiated as a means of long-term pension provision, the annuities would begin to flow when people reached retirement age and that the tax would be paid. Using sophisticated taxation lawyers and other such individuals as we have in this country, people sought another mechanism to further defer taxation and perhaps ultimately transform it into a capital gains tax liability in terms of an inheritance tax issue on the basis that the person who built up the pension never took out the annuities, or was not in mind to take them out — and obviously did not require them, given the size of the lump sums involved and the tax-free element.