Dáil Éireann debate -
Tuesday, 29 Jul 1975

Vol. 284 No. 4

In Committee.

Minister for Finance (Mr. R. Ryan)

I move the acceptance of recommendation No. 1:

Section 14

1. In page 15, line 28, that ", or such longer period as the Revenue Commissioners may by notice in writing allow," be inserted after "years".

The recommendation suggests that the period of time within which a family settlement should qualify under section 14 (6) should be extended from two years to three years. That was the recommendation of Senators Ryan and Years. It is accepted that in certain circumstances such as, for instance, geographical separation, it may not be possible to get the various interested parties to come together and that the limitation of two years would prevent deserving cases from benefiting from the provision in subsection (6) of section 14. Indeed, it might happen that the limitation of three years might have a similar effect. In practice, arrangements may take a number of years to complete especially where there are large families and some of them are living abroad.

It is, therefore, agreed that the period of time should be extended. In some cases a period of three years might not be adequate to provide for this possibility and to give a degree of flexibility it would be better to give the Revenue Commissioners some discretion rather than confine the period to any particular period of years. It will normally be expected that the two year period will apply but the interested parties may inform the commissioners of any difficulties which they encounter and on the basis of the facts the commissioners will allow a suitable extension of time. I trust the House will find the recommendation acceptable.

Mr. Colley

This recommendation seems reasonable to me having regard to the circumstances that can arise. It is conceivable that in some circumstances the period required would be longer than two years and even, as the Minister said, in some cases longer than three years. I feel, therefore, to allow the Revenue Commissioners discretion to extend the time by notice in writing is probably the only practical way to deal with the problem. I support this recommendation.

Major de Valera

It is in accordance with the principle I have advocated often enough on the Bill.

Mr. R. Ryan

Sometimes the Deputy has not been too happy about leaving discretion to the Revenue Commissioners.

Recommendation agreed to.

Mr. R. Ryan

I move the acceptance of recommendation No. 2.

SCHEDULE 4

2. In page 74, paragraph 11 (1) (d), that "other than shares quoted on a stock exchange" be inserted after "clause (a), (b) or (c)".

The operation of paragraph 11 of Schedule 4 is confined to particular items. These include

shares in a company deriving their value or the greater part of their value directly or indirectly from assets specified in clause (a), (b) or (c).

This wording is similar to the wording in subsection (8) (a) of section 4 which relates to the charge on non-residents, except that the words "other than shares quoted on a stock exchange" which appeared in the latter subsection are not in subparagraph 1 (d) of paragraph 11 of Schedule 4, page 74. When paragraph 11 was being drafted it was felt that to ask the purchaser of shares from a non-resident vendor to establish whether the shares were quoted or not might give him some slight difficulty and there was concern to make the purchasers task as easy as possible.

In the course of the debate in the Seanad on this point it was urged that it is more than likely that purchasers or, in any event, their advisers will know if stocks are quoted and the extent to which a person may be saved time and trouble may well be out-weighed by some degree of inconvenience to the vendor. In addition, the difference in wording between subsection (8) (a) and subparagraph 1 (b) of paragraph 11 of Schedule 4 may cause some confusion. In the circumstances it is considered that the wording of the two provisions should correspond. To acheve this, I recommended in the Seanad in deference to representations made, that the words "other than shares quoted on a stock exchange" should be incorporated into subparagraph (1) (d) of paragraph 11 of Schedule 4.

Mr. Colley

I have some doubts about this recommendation because it does not seem to me that the Minister has adverted to the primary point which is involved. Under this paragraph in general there is a provision that in the case of a sale of certain property effectively by non-residents there will be a certain procedure followed to ensure that such non-resident does not, in effect, abscond without paying capital gains tax. I do not think the Minister's remarks adverted to the possibility of such a person leaving the jurisdiction without paying capital gains tax where the property being sold consisted of shares quoted on a stock exchange. It may be that in practice the Minister thinks such an eventuality unlikely. If he thinks it unlikely he ought to have spelt out to us why he thinks that is so.

I have no particular objection to the recommendation except that I would like to be satisfied that there is a good reason for exempting from the provisions applying under this paragraph to various other items such as:

(a) land in the State;

(b) minerals in the State or any rights, interests or other assets in relation to mining or minerals...

(c) exploration or exploitation rights in a designated area;

(d) goodwill of a trade carried on in the State.

All of those items are being subjected to the procedure laid down in this paragraph. The effect of this recommendation is to exempt from that procedure shares quoted on a stock exchange. As I have said I am not opposed to that concept but I do think that before we accept it the Minister ought to explain to the House why he thinks it is not necessary to apply the whole concept of paragraph (11) to shares quoted on a stock exchange.

I should like to point out to the Minister that the heading of this paragraph—Disposal of Certain Assets by non-Residents—was appropriate originally but it is not now appropriate since the paragraph applies on its face to all persons, resident or non-resident. It may be too late to do anything about it but the heading is misleading. However, the matter before us is recommendation No. 2 from the Seanad to which, as I have said, I am not opposed but I think it requires further explanation from the Minister.

Mr. R. Ryan

I would draw the Deputy's attention to section 4 (8) (a) at the top of page 8 which provides that shares in a quoted company in the hands of a non-resident vendor would not be chargeable. Accordingly, this question of avoiding payment of the tax does not arise because they would not be carrying the tax in any event.

Mr. Colley

Could the Minister develop that matter a little further? In that section references to the disposal of assets such as I have mentioned include references to so-and-so but do not include shares quoted on a stock exchange. Is that right?

Mr. R. Ryan

Yes.

Mr. Colley

With regard to the exclusion from section 4 of shares quoted on a stock exchange, in what way does the Minister say that excludes them in the case of non-residents as distinct from residents?

Mr. R. Ryan

We are dealing in paragraph 11 of the Schedule with a non-resident vendor.

Mr. Colley

Hopefully we are. In fact we are dealing with all residents unless the resident applies for a certificate.

Mr. R. Ryan

The provision is relevant to the situation which arises in respect of the non-resident vendor. I understand that is the point Deputy Colley is making.

In subsection (8) of section 4 the provision does not apply to quoted shares. You relate that to the quoted shares in paragraph 11 which means that you do not need to consider the position where you are selling quoted shares which reflect the particular underlying assets of minerals and so forth.

Recommendation agreed to.

Acceptance of Recommendations reported.