The Irish Independent reports that the parent of KBC Bank Ireland has pumped €125m into the lender as it looks to expand its business here.

Filings with the companies' office show KBC's headquarters in Brussels injected the cash into KBC Bank Ireland plc on March 27.

Speaking to the Irish Independent, a company spokesman said the cash was being used to fund expansion and was not a shoring up of the business.

KBC is expanding its presence in Ireland and has opened two new retail offices in Dublin and Cork, with further new offices planned for Limerick and Galway.

"KBC invested a further €125m by way of share capital investment during the first quarter in KBC Ireland (KBCI) to support the ongoing development of KBCI's business in Ireland. KBCI's Tier 1 capital ratio at December 31 was in excess of 11pc," the spokesman said.

Market

The bank has been investing heavily in building awareness of its brand and has successfully entered the retail deposit market. The bank is also planning to launch a current account later this year, the spokesman added.

KBC was formerly IIB bank but the Belgian lender has held at least a majority stake in the business since 1978.

Last year KBC Ireland saw its loss widen to €306m from €269m a year earlier as loan impairment costs headed toward €550m.

KBC said that 2012 was a year of "continued, unacceptably high credit costs'' for the bank as those mortgage arrears in its residential loan book continued to increase, while "collateral values" in its commercial banking book were hit by the ongoing contraction in the Irish market.

The bank's overall loan portfolio fell to €16bn from €16.7bn in 2011 due to what it called "muted economic activity and limited new business demand", as well as the cost of increased loan repayments.

Speaking on their release in February, chief executive John Reynolds said the results reflected an "unsatisfactory business performance".

"We had signalled that we expected conditions to remain challenging in 2012 and this proved the case. However, we anticipate increasing economic stability will lead to more sustainable conditions in 2013, with the bank hoping for reduced credit cost in the year ahead,'' he added.

"KBC Group is a strong and profitable entity and is committed to developing its business in Ireland.

"We recognise the opportunity in Ireland's recovery and are positioning to play our part in that recovery, despite the challenges that remain as Ireland seeks to develop a more sustainable banking sector,'' he added.

KBC has about 10pc of the State's mortgage market and is now looking to increase its retail footprint significantly.

The Irish Independent also reports that employers providing defined-benefit pensions have been told they would serve their staff best by closing the schemes down.

Workers should be provided with a defined-contribution scheme instead, where no other workers would have a call on their expected pension.

Chief investment officer with IFG Corporate Pensions Samantha McConnell said that most employees under the age of 45 who are in a defined benefit scheme were set to get little or nothing.

This was because eight out of 10 defined-benefit plans are in deficit, while pensioners have first call on the assets.

Defined-benefit schemes promise to pay a set level of pension, depending on the years of service. But the promises have become impossible to keep because people are living longer and investment returns have been too low.

Value

Ms McConnell said: "Defined-benefit schemes may be seen as a valuable benefit, but they only have a value if there is something there at the end."

Ms McConnell pointed to the fact that defined-contribution schemes are more cost-effective for employers as the average contribution is 6pc of a monthly salary, compared with 17pc in a defined-benefit scheme.

She said that being part of a defined-contribution scheme would offer employees certainty that didn't exist with a defined-benefit scheme.

"As an employee, you own whatever is in the defined-contribution pot – with defined-benefit schemes, the benefits are a promise, not a guarantee," she added.

Benefits are being reduced or schemes are shutting at AIB, Independent News and Media, the publisher of the Irish Independent, and Grafton.

The Irish Times reports that some people may see their property tax charge being immediately deducted from their bank accounts, the Revenue Commissioners have pointed out. The timing of the deduction depends on the payment method chosen.

A spokeswoman for the Revenue pointed out the range of payment options available after a reader wrote to this newspaper complaining that the charge had been immediately deducted from his account when he had believed the money would be deducted “no earlier than 21st July 2013”.

A range of payment options, including phased payments, is available, including deduction at source from a salary or occupational pension. In such cases the money will be deducted from the first salary or pension payment made in the month of July.

The tax can also be deducted at source from payments received from the Department of Social Protection or Agriculture, Food and the Marine, again commencing from the first payment in July.

Direct debits will be debited from July 15th, and a single debit authority from July 21st.

Payments made online using a debit or credit card result in the full amount of the charge being charged to the account on the day the payment method is selected online.

People who pay the tax using a Mastercard or Visa credit card have to pay an additional 1.49 per cent service charge.

The tax involves house owners having to value their property, calculate their liability, and submit their return by the the relevant deadline.

The size of the tax due depends on the estimated value of the property concerned in May. Property with a value of up to €1 million will generate a tax charge of 0.18 per cent. Property with a value of more than €1 million creates a charge of 0.18 per cent for the first €1 million in value and 0.25 per cent for the value thereafter.

The Irish Times also reports that middle-grade civil servants have strongly backed the proposed new Croke Park agreement in a ballot.

Members of the Public Service Executive Union (PSEU) have voted by 61 per cent to 39 per cent in favour of the proposed new deal.

There was a 74 per cent turnout in the ballot.

The PSEU is the first of the larger public service unions to support the proposed agr eement in a ballot.

Two other unions, representing relatively small numbers of craft workers mainly in local authorities and the health service have also backed the deal.

However members of eight unions have voted to reject the proposed Croke Park II agreement.

A series of other unions are scheduled to announce the results of their ballots today.

A key vote will be Siptu which has around 63,000 members in the public service.

Some sources have maintained that the Siptu vote will be very tight.

If Siptu members vote against the proposed deal, it will effectively be dead in the water as it could not be ratifed by the public service committee of the Irish Congress of Trade Unions without its support.

The Irish Examiner reports that a briefing issued by Revenue said it would not pursue mortgage holders who had a portion of their debts written off, but tax experts expect a raft of audits to make sure that bogus write-offs are not being created to lower tax bills.

The Capital Acquisitions Tax Consolidation Act 2003 states that, under any circumstance other than inheritance, a person who becomes “beneficially entitled in possession” to goods, property, or money will be subject to tax.

Christine Keily, tax analyst with Taxback.com, said the existing legislation meant people were changing from owing money to the banks to owing money to Revenue.

“Under Capital Acquisitions Tax Consolidation Act 2003 legislation, an individual is deemed to take a gift, and potentially generate a tax liability, where they receive a benefit unless they have paid full market value for that benefit.

“Furthermore, under Capital Acquisitions Tax Consolidation Act 2003 legislation, a person could be deemed to receive such a taxable benefit in circumstances whereby a debt is released.

“So, the big question here was whether debt forgiveness by the banks would trigger such a tax liability? With so many people in financial difficulty, the prospect of replacing the chasing bank with the tougher Revenue Commissioners wasn’t going to assist in their financial recovery, and therefore, a solution needed to be found.”

The Revenue clarification will be welcomed by people who had taken out buy-to-let mortgages and were now unable to repay them, she said.

“The Revenue’s e-brief provides that, where such a debt is released by a financial institution for bona fide commercial reasons, Revenue’s approach will be that the financial institution did not make a gift of any sort to the individual.

“This means that the individual would not acquire a Capital Acquisitions Tax Consolidation Act 2003 charge in respect of any such debt restructuring, forgiveness or write-off arrangement.”

The news that Revenue will not seek to claw back parts of debt settlements from buy-to-let mortgage holders will be welcomed by thousands of investment property owners.

According to Central Bank figures, 28,421 buy-to-let mortgages were in arrears of more than 90 days by the end of December, compared to 27,018 at the end of September.

However, despite the news that people will not be taxed on restructuring their mortgages, Taxback.com believes Revenue will open audits and investigations into arrangements to check they are not orchestrated for the avoidance of tax.

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