asked the Minister for Finance (a) the amount of revenue raised in 1984 from tax yields on the disposal of developed property; and (b) the estimated amount of revenue that will be raised as a result of doubling the 5 per cent VAT rate on the construction industry.
Written Answers. - Construction Industry Tax Yield.
525.
(a) Presumably the Deputy has in mind the tax paid on the disposal of property by a builder or developer after it has been developed. Such disposals are subject to value-added tax and stamp duty except where exemptions apply (such as certain disposals by the State and local authorities in the case of value-added tax and new grant-sized houses in the case of stamp duty). The profits derived from the sale of developed property, which is trading stock of a trade of building or of dealing in or developing property, are included in the computation of the trading profits assessable to income tax (or to corporation tax in the case of companies) and accordingly are not subject to capital gains tax.
As regards value-added tax it is not possible to state the yield of tax from the disposal of developed property as value-added tax returns are not submitted in a manner which would enable such yield to be identified. However, it is estimated on the basis of non-Revenue statistical data that the net value-added tax yield in 1984 from buildings and construction work was £64 million.
Statistics are not available which would enable separate figures to be supplied in respect of the stamp duty paid on disposals sals of developed property.
No statistics are available as to the amount of income tax or corporation tax arising from the disposals in question. The net profits from the relevant sales would be included in the accounts of the vendors concerned and it would not be possible to quantify with any degree of accuracy the tax in such cases. However, it is tentatively estimated that the income tax (non-PAYE) and corporation tax yield from the construction industry and property dealing and development sector as a whole in 1983, the latest year for which detailed statistics are available, was of the order of £35 million.
It may be of interest to the Deputy to note that sales of development land by persons other than those trading as builders or dealers and developers will normally attract capital gains tax. While the same difficulty arises concerning the provision of statistics in this area as is encountered in the case of disposals of developed property, it has been tentatively estimated that the capital gains tax ultimately payable in respect of such sales in 1983 will amount to £5 million.
(b) An estimate of the net value-added tax yield from buildings and construction work in 1985 is £107 million.