Ireland

Property investors have been granted a reprieve in the Finance Bill, with the restriction of section 23-type tax reliefs being postponed until at least 2012, the Irish Times reported. Landlords have been lobbying hard since the phased abolition of property-based legacy reliefs was unveiled in last December’s Budget. The proposal that section 23 tax relief would be ring-fenced for use against rental income from the property giving rise to that relief, as opposed to all Irish rental income as was previously the case, proved particularly controversial.

Music and books retailer HMV has appointed accountancy firm KPMG to advise on its debt and help it meet an April test of its borrowing rules, a source familiar with the situation said, the Irish Times reported. The source said today that KPMG, already an adviser to HMV, has been given the additional task of tackling the company's debt, reported as £152 million when it published half-year results in December. That is more than the company's market capitalisation of about £108 million.

The High Court has approved a survival plan for the Zumo chain of juice and smoothies bars, InsolvencyJournal.ie reported. Mediterranean Food and Wine Ltd, the company which operates Zumo, was granted court protection from its creditors last October because it had become insolvent and was unable to pay its debts. The firm is the largest fruit juice and smoothie bar chain in Europe and has a presence in 12 countries. At its peak, it operated 33 stores at home and abroad plus another seven under a franchise agreement.

David Drumm has reached agreement with lawyers for Anglo Irish Bank on a proposed protective order. If approved by a judge, it will enable him to keep elements of his bankruptcy proceedings secret, the Irish Times reported. The bankruptcy judge, Frank Bailey, will decide today whether the Drumms’ holiday home in Cape Cod can be sold in the interest of paying Mr Drumm’s debts.

House prices declined by 3.5 per cent in the final quarter of last year and are down 38 per cent since prices peaked at the end of 2006, according to the latest Permanent TSB/ESRI House Price Index, the Irish Times reported. While the rate of decline in average house prices in Ireland rose in the fourth quarter the rate of decline for the year as a whole was significantly less than what was seen in 2009. House prices fell by 10.8 per cent in 2010 compared to a drop of 18.5 per cent in 2009.

French President Nicolas Sarkozy has said Ireland cannot benefit from the EU’s financial aid while maintaining its low corporate tax rate, the Irish Times reported. Making the case for closer fiscal harmonisation between euro zone states, Mr Sarkozy said: “I deeply respect our Irish friends’ independence and we have done everything to help them. But they cannot continue to say ‘come and help us’ while keeping a tax on company profits that is half [that of other countries]…We cannot speak about economic integration without the convergence of fiscal systems . . .

A proposal to pay the holders of some €1.3 billion of Quinn Group debt a cash payment of up to €200 million, in lieu of guarantees over the assets of subsidiary companies of Quinn Insurance, was one of a series of recommendations put forward by the Quinn family in its discussions with Anglo Irish Bank on a possible joint takeover of the insurer, the Irish Times reported. The details of the Quinn family’s proposals for its proposed takeover of the company have emerged as the sale of Quinn Insurance reaches its final stages.

Yesterday’s High Court decision dealt what may prove a fatal blow to McInerney’s bid to stave off receivership, but the warning bells have been ringing for the homebuilding firm for some time, the Irish Times reported in an analysis. At the height of the boom in 2007, McInerney, one of the country’s oldest homebuilders, had revenues in excess of €200 million and was expanding quickly. However, the collapse in the Irish property and construction sector hit its business hard. By 2008 it was in the red, posting a loss of €47 million. In 2009 it lost another €25 million.

The Byrne Hotel Group, which owns three hotels in Galway, is in talks with its banks over debts of more than €43.5 million, The Irish Times reported. The company does not expect to be able to make any capital repayments over the coming years and is in discussions to put all loans on an interest-only basis for five years, according to recently filed accounts for its group holding company R Byrne Concrete Ltd. The group owns the Victoria Hotel, the Eyre Square Hotel and the Salthill Hotel, all in Galway, as well as the Metro Hotel in Leicestershire, England, and other property.

The EU authorities and the International Monetary Fund (IMF) have relaxed a tight deadline set in the bailout deal for the Government to establish “ambitious” new loan-to-deposit ratio targets for Ireland’s struggling banks, the Irish Times reported. The high loan-to-deposit ratios of Ireland’s banks, a legacy of imprudent property lending and declining deposits, are a key measure of their weakness.