Bernard J. Durkan
Question:387 Mr. Durkan asked the Minister for Finance when a tax free allowance will issue for a person (details supplied) in County Kildare; and if he will make a statement on the matter. [17925/99]
Written Answers. - Tax Allowances.
I am informed by the Revenue Commissioners that a certificate of tax-free allowances in respect of the current tax year, 1999/2000, issued to the taxpayer on 22 February 1999. After that certificate issued, the inspector of taxes became aware that the taxpayer has been in receipt of a lone parent's allowance from the Department of Social, Community and Family Affairs. The lone parent's allowance is taxable but, as the inspector had not been informed that the taxpayer was receiving the allowance, no adjustment had been made to her tax-free allowances and underpayments have arisen as a consequence. A revised certificate of tax-free allowances issued, on a week-one basis to minimise hardship, on 16 June 1999. The allowances on the revised certificate have been reduced so as to collect the amount of income tax due on the taxpayer's lone parent's allowance in the current tax year.
A review of the taxpayer's returns of income for 1995-6, 1997-8 and 1998-9 show underpayments amounting to £1,890.20. This amount is to be collected by reducing the taxpayer's tax-free allowances over a three year period commencing on 5 April 2000.
In a letter dated 15 September 1999, the inspector requested the taxpayer to furnish documentation in respect of the years 1994-5 and 1996-7. When the requested documentation is received, the inspector will finalise his review of the taxpayer's income tax liability for those years.
John Perry
Question:388 Mr. Perry asked the Minister for Finance if, further to Parliamentary Question No. 128 of 1 June 1999, holiday cottages inside the areas designated in the six Border counties in the north-west have the same tax breaks as hotels; if these capital allowances can be used to offset personal income without a £25,000 ceiling; the plans, if any, he has to promote holiday cottages in the north-west; and if he will make a statement on the matter. [17926/99]
The Deputy is referring to the special capital allowances scheme for hotels in the seven counties of the north and north-west of the country. The scheme operates by enabling passive individual investors in hotels of three star standard and upward to fully offset capital allowances on these hotels against all income i.e. non-rental income as well as rental income. There is no annual ceiling of £25,000 for non-rental income for the capital allowances for such purposes, i.e. the full amount of the capital allowances in question is offsettable in each year against non-rental income in the case of passive individual investors in these hotels. A £25,000 annual ceiling for capital allowance purposes against non-rental income applies in the case of passive individual investors in other buildings. However, in the case of hotel investment by passive individual investors in other parts of the country, the capital allowances are totally ringfenced, i.e. available for offset against rental income only.
The purpose of this scheme is to promote investment in the provision of quality hotel accommodation in the north and north-west. Accordingly, the scheme does not apply to holiday cottages and I have no plans to extend the scheme to such developments.
Capital allowances are available for investment in Bord Fáilte registered holiday cottages in all areas of the country, but these allowances are totally ringfenced to rental income in all cases. As far as non-registered holiday cottages are concerned, capital allowances are available only within areas designated under the seaside resort scheme and again such allowances are totally ringfenced to rental income.