Vol. 568 No. 1
284 Mr. Ring asked the Minister for Finance if he has reviewed the tax breaks for nursing homes recently; the number of nursing homes which have availed of the tax break; and if there is a review taking place in relation to this. [15772/03]
As the Deputy is aware, in the 1998 budget I introduced a system of capital allowances for expenditure on the construction or refurbishment of nursing homes that are registered with a health board. The purpose of that measure is to encourage investment in increased nursing home capacity and in improved facilities for the elderly and incapacitated, for which there is a growing demand. In the Finance Act 2002 I extended the scope of that relief by providing capital allowances for expenditure incurred on the construction or refurbishment of housing units associated with a registered nursing home. That scheme acts as an incentive for the provision of suitable residential accommodation in caring for elderly persons who are no longer able to live alone without some level of care but who do not as yet need to transfer to full nursing home residence.
I understand that, under the normal self-assessment rules, any person seeking to claim capital allowances in respect of a qualifying building would submit their claim on the appropriate tax return form. However, the form does not distinguish between capital allowances claimed in respect of nursing homes and on private convalescent facilities from those claimed in respect of other buildings entitled to capital allowances. Consequently, it is not possible for the Revenue to indicate the level of take-up of that specific incentive. I would like to assure the Deputy that all tax reliefs and incentives are kept under review, especially in the context of the budget and Finance Bill, to ensure that they continue to fulfil the objective or objectives for which they were introduced.
285 Mr. R. Bruton asked the Minister for Finance the various tax reliefs which are available which offer tax breaks on income from outside of the relieved trade or activity; the upper rate of relief that can be obtained in each case; and the most recent estimate available to him of the level of relief being availed of. [15875/03]
It is assumed that what the Deputy has in mind are tax reliefs which are availed of by individuals in circumstances where they are not actively involved in the enterprise in question. Individuals are entitled to relief at their marginal rate of tax. However, it should be noted that under the schemes involving the capital allowances on buildings there is, since the 1998 budget, an upper limit of €31,750 which can be offset against the individual's non-rental income in a year of assessment. Similar limits also apply in the case of the reliefs for investment in films and for the business expansion and seed capital schemes.
I am informed by the Revenue Commissioners that the list of relevant tax reliefs and the associated estimated costs to the Exchequer is as follows:
|
Legislation |
Scheme |
Estimated annual cost to Exchequer€ million (year) |
|
S 268 TCA 1997* |
Industrial buildings allowance |
234 (1999-2000) |
|
S 372 TCA 1997 |
Urban renewal scheme |
20 (2001 – 12 months) |
|
S 372 TCA 1997 |
Town renewal scheme; rural renewal scheme; living over the shop; park-and-ride facilities; student accommodation |
Not individually identifiable; aggregated in tax returns with other capital allowances |
|
S 843 TCA 1997 |
Capital allowances for buildings used for third-level education purposes |
Not individually identifiable; aggregated in tax returns with other capital allowances |
|
S 843A TCA 1997 |
Capital allowances for buildings used for certain childcare purposes |
Not individually identifiable; aggregated in tax returns with other capital allowances |
|
S 344 TCA 1997 |
Multi-storey car parks |
2.5 (2001 – 12 months) |
|
S 352-353 TCA 1997 |
Seaside resort scheme |
Not individually identifiable; aggregated in tax returns with other capital allowances(see footnote ** below) |
|
S 482 TCA 1997 |
Significant buildings and gardens |
4 (1999-2000) |
|
S 481 TCA 1997 |
Relief for investment in films |
29 (2000-01) |
|
S 489 TCA 1997 |
Business expansion scheme and seed capital scheme |
21 (2002); 1.4 (2002) |
286 Mr. R. Bruton asked the Minister for Finance the type of review currently under way to evaluate the costs and the benefits of the tax reliefs listed on pages 65 and 66 of the statistical report 2001 of the Revenue Commissioners; and the reason estimates of the costs of all the allow ances listed are not identifiable within total aggregate. [15876/03]
Generally, the Office of the Revenue Commissioners is the main source of information, statistics and data on tax incentives and expenditures. The Revenue's primary function is firmly centred around the administration of the tax system and the collection of tax. The collection of statistical information flows from that primary function.
The simplification of the returns to be made by taxpayers has meant that the details of some tax reliefs are required in aggregate form on tax returns. The result is that total costs of the individual reliefs concerned cannot be readily identified. For example, capital allowances are treated in this way. Where information regarding individual reliefs is provided separately on tax returns form it can be captured electronically and may be examined centrally by the Revenue. An example is the data relating to the artists' exemption, where virtually all the information relating to numbers of claimants and the amounts exempted from tax can be obtained.
Information relating to claims for reliefs held in paper formats appended to tax returns cannot be extracted without undertaking a manual search on a case-by-case basis. The list of reliefs referred to by the Deputy in the 2001 Revenue statistical report largely falls under that heading.
I do not believe that reverting to the lengthy return of income forms, separately listing every relief, would be acceptable to compliant taxpayers or that it would be consistent with the efficient administration of the tax system and collection of tax to impose such an additional burden of compliance on them. While a detailed manual survey into individual reliefs is not normally possible given resource constraints, the Revenue nevertheless provides a significant body of information on tax reliefs, particularly where the information is identified separately on tax returns.
However, it is important that data be improved to facilitate assessments of such expenditures and reliefs. The Department of Finance is working closely with the Revenue Commissioners to investigate information and data-capture issues arising with a view to producing possible solutions. The challenge is twofold: the first is to identify the optimal manner of obtaining the information that is required to monitor and cost existing reliefs, and the second is to obtain such information with due regard not to overburden compliant taxpayers.
I also point out that some changes have already been made in that area. As mentioned above, regarding the artists' exemption, considerable information is now available on some reliefs. More recently, as the Deputy will be aware, I stipulated in the Finance Act 2003 that returns of income must henceforth be made for stallion stud fees and commercially managed woodlands.
