Select Committee on Finance and General Affairs debate -
Wednesday, 10 May 1995

SECTION 53.

Mr. McCreevy

I move amendment No. 53:

In page 89, subsection (7)(a), line 10, after "it" to insert "consists of residential accommodation on the floor or floors above ground floor retail premises or it".

The purpose of the amendments relates to the fact that tax breaks in resort areas should not just relate to tourist facilities, but also to residential accommodation, for example, within the premises of a shop or over it.

The amendment specifically refers to above shop premises, a type of property which is often very marginal. This part of the Bill will benefit many seaside resorts, a move with which I agree. As the Minister knows, I pushed for it in my time. There are shop premises, which would be very expensive to refurbish, but which are an integral part of seaside resorts. My amendment seeks to ensure that the residential part of the property, above the shop premises, would qualify.

This type of property is often marginal and would cost a fortune to renovate. However, as it stands, no economic benefit would accrue even if it was renovated. This is very expensive work and should be included in the Bill. This move would be in line with the aim of this part of the Bill and would not be expensive to implement.

Mr. Quinn

If I understand the Deputy correctly, he means a situation where a person has a two or three storey premises in a designated tax resort, but the two upper floors are no longer utilised in the traditional, historic sense in terms of where the family originally lived. It is used for storage or whatever and under-utilised.

The intention of the amendment is that this person would be encouraged to carry out a general refurbishment, both of their shop and more specifically, as a result of the tax breaks, the accommodation or under-utilised space above the ground floor. This accommodation in turn would then be used as a tourism accommodation facility, let out for that purpose rather than family accommodation. If the intention is to increase the supply of tourist accommodation, the amendment could be accepted.

Mr. McCreevy

Subject to change.

Mr. Quinn

I need to check the position for Report Stage. However, if the Deputy is stating that where there is mixed accommodation, including retail on the ground floor and residential accommodation, which would be refurbished for the purpose of additional tourism letting and not for 52 weeks of the year——

Mr. McCreevy

No.

Mr. Quinn

——to the son in law, cousin or whatever, the amendment could be accepted if it meets the other conditions.

Mr. McCreevy

The Minister's advisers will have to consider the appropriate drafting.

Mr Quinn

We will have to look at it in terms——

Mr. McCreevy

The position outlined by the Minister is what I am trying to achieve. I can think of a few resorts where this move would help.

Chairman

Is the amendment being withdrawn on the basis that the Minister will come back to it on Report Stage?

Mr. Quinn

We will come back on Report Stage and inform the Members regarding the location of the provision. It may be possible to include it in another section. The case for the amendment has been well made and it is accepted in principle.

Amendment, by leave, withdrawn.

Mr. McCreevy

I move amendment No. 54:

In page 90, subsection (11), line 33, after "authority" to insert "but voluntary contributions towards the costs of expenditure by public or community groups or local authorities in the construction or refurbishment of qualifying tourism facilities shall qualify for relief from income tax at the standard rate".

I was asked to put down this amendment by a colleague from the west, who was asked to propose such an amendment as a result of representations he received from the tourism organisation in Westport. The Minister's officials are obviously au fait with this request. My colleague Deputy Hughes and I drafted this amendment on foot of the representations he received. Its purpose is to allow voluntary contributions towards the cost of public and community groups. Apparently it is not clear whether payments made by businesses to community or local authority owned tourism facilities are tax deductible. The purpose of this amendment is to make sure they are.

Mr. Quinn

I am afraid I will not be so accommodating in relation to this. Proper tax advice given to a business organisation could make its contribution to something like this tax efficient. I can see a provision of this type — stating that voluntary contributions towards the cost of expenditure by public or community groups or local authorities in construction or refurbishment would qualify for relief from income tax at the standard rate"— running like a bush fire throughout the country, and people with the Deputy's skill would advise on it.

I know what the Deputy is trying to do and we have received a representation in respect of Westport but, quite frankly, this would be a barn gate provision.

Mr. McCreevy

I can accept what the Minister is saying. This goes back to the fundamental principle of what kind of expense is allowed against the profits of a business, an expense necessarily incurred for the purposes of the trade, rather than the employee one which is "in the performance of". If a tourism related business made a contribution to a community-owned project it would more than likely be an allowable expense for that type of tourism organisation because it would be for the purposes of their business.

Mr. Quinn

That is what we thought.

Mr. McCreevy

Other businesses in the town that might want to make this payment to that type of facility would not be allowed for it. On foot of the Westport tourism organisation's representation, Deputy Hughes was trying to ensure that would qualify. However, I accept what the Minister has said because it would be very difficult to police.

Mr. M. McDowell

Perhaps Deputies Hughes and McCreevy would look to the possibility of taking out advertisements as a means of transferring money. There is virtually no enterprise in the country that cannot buy an advertisement. That would be an easier way to do it. One can advertise in a political magazine but cannot make a tax deductible contribution to a party, is not that right?

Amendment, by leave, withdrawn.

Section 53 agreed to.