Dublin are set to push for a radical overhaul of European insolvency regulations, amid growing concerns that there are an increasing number of Irish property developers moving to the UK to take advantage of its liberal bankruptcy laws.
Ireland’s minister for justice, Alan Shatter, has raised concerns that people are engaging in “forum shopping” by relocating to the UK to declare bankruptcy; and it has been widely reported that Dublin is set to use its presidency of the European Union – beginning in January – to press for a new debt resolution architecture in Europe.
Mr Shatter, said: “The very essence of having a common market is that you need to have common rules with regard to bankruptcy legislation and not rules which appear to be in conflict with each other and can provide incentives for people to engage in bankruptcy tourism.”
It is believed that there are several hundred business people and developers who have already, or are in the process of, relocating to the UK to escape Ireland’s bankruptcy laws.
Currently, under the Irish bankruptcy regime pension pots can be used to pay off creditors and it can take up to twelve years to be discharged from debts. However, in the UK, people are generally discharged from their debts within a year – and they can keep their private pensions.
If your business is currently experiencing financial difficulties, before things become worse, seek financial advice and guidance from an experienced team; such as Milsted Langdon.
The accountancy team at Milsted Langdon, can help find a range of financial solutions which have the potential to prevent your business from entering insolvency or being declared bankrupt.
As an accountant, Simon Rowe, specialises in tax, Business Turnaround and Insolvency.