Dáil Éireann debate -
Thursday, 27 May 1993

Vol. 431 No. 5

Written Answers. - Sale of Taxi Plates.

Richard Bruton

Question:

36 Mr. R. Bruton asked the Minister for Finance if his attention has been drawn to the interpretation placed by the Revenue Commissioners on the sale of taxi plates which results in denying rollover relief for those using the sale of such plates to invest in other assets in the transport business; and if he realises that this is causing huge problems for fledgling businesses.

Minister for Finance (Mr. B. Ahern)

I understand from the Revenue Commissioners that the sale of taxi plates falls outside the scope of setion 28 of the Capital Gains Tax (CGT) Act 1975, which provides for deferment for CGT purposes of gains realised on the disposal of certain business assets, including plant and machinery, buildings, land and goodwill, provided that certain conditions are met.

The number of public service vehicles licences (taxi-plates) in issue at any given time is controlled by the public authorities. These licences derive their value from the fact that their numbers are limited and not from any inherent value or characteristic of one licence over another. The disposal of a taxi-plate is in effect the disposal by its owner of his legal entitlement to operate a taxi and accordingly would not be a disposal of a qualifying asset as provided for in section 28 of the Capital Gains Tax Act, 1975. Since the sale of the taxi-plate arises when the owner is leaving the taxi business, the payment of capital gains tax does not affect the taxi business. It is assumed therefore that the Deputy is referring to the effect of this capital gains tax payment where the owner goes into a new business. Since a large capital gain can often arise on the disposal of a taxi-plate, I do not believe that payment of capital gains tax in such situations should cause a major problem. Indexation relief and the annual CGT relief for individuals will of course normally apply to such disposals.