The amendment reads:
"and provided also that whenever a disposal inter vivos results in a liability both to Capital Gains Tax and to Gift Tax, only such one of those taxes as imposes the higher amount of tax shall be chargeable.”
The first point the Minister made in reply was that there is no such thing as a gift tax. May I refer to section 4 of the Capital Acquisitions Tax Bill the Second Stage of which has passed this House? Section 4 says
The capital acquisitions tax to be called gift tax and to be computed as hereinafter provided shall et cetera be charged, levied and paid.
In order to achieve what this amendment seeks to achieve and to achieve what the Government set out in its White Paper that they were going to do, it was necessary for me to draft an amendment which would refer to gift tax. The Minister, however, says there is no such thing as a gift tax because the Bill has not been passed by the House. I can only say that if the Minister says that he is adopting the standards and techniques of a threecard-trick man, and his three cards are the Capital Gains Tax Bill, the Capital Acquisitions Tax Bill and the Wealth Tax Bill and whenever it suits him he will juggle them around and say: "It is not in that, and it is in that, and is not in the other one." Now, if the Minister chooses to introduce a package of taxation which, he says, is to replace death duties, and if he chooses to do it in the form of three separate Bills, it is simply not good enough, in my opinion, for him to plead in this House that we cannot have any regard to any of the other Bills. The whole point of this amendment, and the whole point of the statement in the White Paper, was that both gift tax and capital gains would not be applied to the one transaction. That is what the Government said. The only reason the Minister gave for departing from that provision of the White Paper was that not to do so would provide a loophole for avoidance. It is of very considerable significance that in dealing with this amendment today the Minister did not rely on the avoidance argument at all because the amendment is so drafted as to ensure that it will not provide a loophole, that it will involve anybody who engages in a transaction that would be covered by this amendment in tax at the higher rate, and definitely at the higher rate; capital gains or gift tax, in relation to the particular transaction, that is the one that will have to be paid to the Exchequer, the one paying the higher amount of tax. So there is not any loophole for avoidance in this at all.
The Minister then, in substitution for that argument, as advanced with great vehemence at the Committee Stage, fell back on two other arguments: firstly, that one of these taxes is payable by the donor and the other by the donee. This, of course, is not something new. This is something the Government had in contemplation when they issued their White Paper; they were aware of this fact and they were prepared to live with it. There is no insuperable difficulty as far as the Minister is concerned in the fact that one tax is payable by one party and the other by another.
The Minister then referred to the high thresholds in the capital acquisitions tax and, indeed, the points made in that regard by Deputy de Valera and Deputy Fitzpatrick are quite relevant. I would, however, like to point out that in the case of transactions or gifts, even between some related persons, the thresholds provided in the Capital Acquisitions Tax Bill are quite low. We are not just talking about cases where the consideration is over £150,000; we are talking about cases that are much smaller than that too. But, in so far as we are talking about the large cases, the Minister has on a number of occasions told us about the terrible iniquity of the death duty system under Fianna Fáil whereby 55 per cent tax was payable. He did not mention, of course, that that was in cases where the estates were valued at more than £200,000. If the Minister were prepared to bleed so hard for cases above £200,000 it seems to me it is not open to him to talk about this benefiting only cases above £150,000. That would not be true. This involves cases much smaller than that, even in transactions between people who are related.
The real point of this amendment is one that was acknowledged by the Government in its White Paper, the inequity of applying both gift tax and capital gains tax to the one transaction. That was recognised by the Government in its White Paper and nothing the Minister has said since has taken away from that inequity. The only justification he has attempted to give that had any substance was that to apply this principle would give a loophole. This amendment has been so designed as to close the loophole. I cannot see why the Minister would not accept it if he is concerned to avoid inequity. The more one sees of the Minister's performance on a number of these matters the more one wonders whether he is really concerned with equity at all or whether he is not simply concerned to push through the measures as they have come up to him, in some case without regard to any of the consequences and, possibly, without consideration of or understanding of the consequences of what he is pushing through.
In my view this is a very clear example that the Government itself is on record as recognising the inequity that would be involved in applying both taxes. This amendment seeks to avoid that inequity and, at the same time, provides a method of closing the loophole of avoidance to which the Minister referred and provides the Exchequer with the maximum yield under whichever of the taxes is applied. Yet the Minister refuses to accept it. The refusal of the Minister to accept this amendment is indicative of how far he has gone even since the White Paper was produced. He has advanced no convincing reason whatever for departing from the White Paper once the loophole of avoidance he talked about has been closed. He has tacitly admitted it has been closed on this amendment because he did not rely on that argument today as he did before.
All of this to me suggests that, since the publication of the White Paper, the Minister has gone very far along the road of not caring about the inequity or the consequences of what he is doing in this legislation. That is unfortunate, not only for the Minister in the longer term, but unfortunate for this country. Sometimes there has to be inequity and one has to live with it. This is not such a case. The introduction of inequity into our system by the legislation we introduce is something that the Minister ought to be avoiding and, indeed, he ought to be ashamed of being responsible for introducing inequity deliberately when a method is suggested to him by which he does not have to do this and can still achieve his purposes. However, the Minister has chosen to take that line. I have no doubt that he is wrong and, in accordance with the provisions of the Government's White Paper on Capital Taxation he is wrong also. We on this side of the House, have done our part as far as we could to close the loopholes and still avoid the inequity.
The Minister refuses to accept that this should be done despite the Government's previous commitment on this specific point. That is his business. It is he and his colleagues who will have to account for this and the consequences of the other things in which they are engaging. We on this side of the House have done our part as far as we could. We cannot do any more if the Minister persists in an attitude of that kind.