I move amendment No. 80:
In page 59, subsection (1)(a)(i), line 24, to delete "shares" and substitute "company".
This is a technical amendment to correct a drafting error.
SECTION 51.
Amendment agreed to.
Question proposed: "That section 51, as amended, stand part of the Bill."
What is the purpose of this section which deals with the roll-over relief on shares?
This amendment amends section 27 of the Finance Act, 1993, which provides for deferral of capital gains tax when the proceeds from the disposal of certain shares are reinvested in shares in unquoted trading companies. To qualify for the deferral, the companies in which the proceeds are invested must remain unquoted for three years. Section 27 currently defines an unquoted company by reference to the definition of an unquoted company in the BES legislation. As that definition is now being amended by section 7 of the Bill for the purposes of the BES legislation, the unamended version is being inserted in section 27 for the purposes of that section. Furthermore, to encourage companies to seek a quotation on the DCM of the Stock Exchange, section 51 provides that where a person makes a reinvestment in a qualifying trading company, but before the end of the three year period, that company will be admitted to the DCM. The capital gains tax liability will not crystallise simply because the company is then a quoted company.
Amendment agreed to.
Section 51, as amended, agreed to.
Amendments Nos. 81 and 82 not moved.
Section 52 agreed to.
NEW SECTION.
I move amendment No. 83:
In page 60, before section 53, to insert the following new section:
"53.—(1) Section 39 of the Finance Act, 1982, is hereby amended by the insertion after subsection (3) of the following subsection:
‘(3A)(a) Subject to the following provisions of this subsection, subsection (1) shall not apply to consideration obtained for a relevant disposal where—
(i) throughout a period of five years ending with the time of disposal, the old assets, and
(ii) the new assets within the meaning of section 28 of the Principal Act,
are assets of an authorised racecourse.
(b) Section 28 of the Principal Act shall apply in relation to assets of an authorised racecourse as if—
(i) references in subsections (1) and (2) of that section to new assets ceasing to be used for the purposes of a trade included a reference to new assets ceasing to be assets of an authorised racecourse, and
(ii) paragraph (b) of section (8) had not been enacted.
In this subsection—
(c) "assets of an authorised racecourse" means assets of a racecourse which is an authorised racecourse where the assets are used for the provision of appropriate facilities or services to carry on horseracing at race meetings or to accommodate persons associated with horseracing, including members of the public;
"authorised racecourse" has the same meaning as it has in section 2 of the Irish Horseracing Industry Act, 1994.'.
(2) This section shall apply and have effect in respect of relevant disposals made on or after the 21st day of April, 1997.'.
This section relates to racecourses, on which Deputy McCreevy is an authority. This amendment refers to the Capital Gains Tax Act, 1975, and provides for the deferral of capital gains tax and the disposal of certain trade assets where the proceeds of the disposal are reinvested in other trade assets. The deferral is also available to bodies with the sole aim of promoting athletic or amateur games and sports. The Finance Act, 1992, introduced a special tax regime for the disposal of development land. Section 39 of that Act excluded the disposal of development land from tax deferral under section 28. An exception was made in the case of development land held by the sporting bodies I mentioned earlier.
This new section 53 will extend the availability of capital gains tax deferral on the disposal of development land to racecourses authorised by the Irish Horseracing Authority, established by the Irish Horseracing Act, 1994. This deferral will apply only to the extent that the proceeds of the disposal of development land are reinvested in the assets of an authorised racecourse. The deferral will continue only as long as the new assets are used for the purposes of that racecourse and as long as the racecourse remains an authorised racecourse.
A proposal has been made to sell Limerick racecourse and build a new one in another location. The people concerned want to retain the entire asset value of the disposal to upgrade and improve the new racecourse.
I have no problem with this amendment, but an injustice is being done.
Obviously, this is not confined to Limerick.
While I have not been lobbied on this matter, it was raised recently in my constituency. The people in Limerick are reinvesting the proceeds from the sale of their racecourse in another one in a different location. Naas racecourse, is an authorised racecourse under the rules of the Irish Horseracing Authority and, unlike Limerick, is a grade one track. To improve its stands and facilities, the company decided to sell off part of the racecourse, but the proceeds were subject to capital gains tax. Houses are currently being constructed on the left hand side of the racecourse. I understand representations were made about this matter, but the proceeds were not exempt from capital gains tax. I have no professional interest in the accounts of Naas racecourse. But representations in respect of Limerick racecourse were successful.
This provision will apply only to disposals made on or after the 21st day of April 1997 and, therefore, cannot apply to Naas racecourse which disposed of its property last year. An injustice is being done to the owners of that racecourse. I will be disappointed if lobbying succeeds in the case of Limerick, but not in the case of Naas. I understand the owners of Limerick racecourse will not have to pay capital gains tax. I am not surprised this amendment was tabled, but its provisions will not apply to Naas racecourse.
I was not lobbied in the case of Naas racecourse. During a recent visit to Limerick, strong arguments were put to me about the racecourse. If similar arguments had been put to me in respect of Naas, I would have considered an exemption for it. The benefit of this exemption will remain with the company as long as it remains a racecourse or a cultural amenity promoting the racehorse industry and tourism. I do not know the full details of the racecourse in Naas and I was not lobbied in that regard.
I was not lobbied either, but I read in local newspapers that lobbying had taken place. I am sure representations were made to the Revenue Commissioners and the Department of Finance. It would be unfair to single out Limerick racecourse for exemption.
I take the Deputy's point, but I am not sure what we can do about the matter.
We could change paragraph (2) which states "This section shall apply and have effect in respect of relevant disposals made on or after the 21st day of April, 1997". That would be very simple.
We will consider it before Report Stage.
I assure the Minister that Naas racecourse is an authorised course under the requirements of the Irish Horseracing Authority. The Minister need only substitute "the 21st day of April, 1995 for "the 21st day of April, 1997". Naas is the only racecourse that would be affected. The racecourses on the north side of Dublin and in Mullingar were disposed of some years ago.
I erroneously informed the House a few minutes ago that I was not lobbied in respect of Naas racecourse. Apparently I was, but obviously I did not respond with the same alacrity as I did in the case of Limerick. I met one of the people directly involved in Limerick racecourse who put forward a very convincing argument. Equity and justice suggest that similar treatment should apply to both racecourses.
Because it sold only a few acres of land, the money involved in the case of Naas would be small compared to Limerick.
I will examine this matter, but there may be legal and drafting difficulties. I am not in a position to simply alter the date retrospectively. I will deal with this on Report Stage, but obviously the same terms and conditions would apply.
Apart from the date, the amendment is acceptable.
It applies only to racecourses and we do not know how far we would have to backdate it.
Approximately 18 months.
We will have to take legal advice on the matter.
Amendment agreed to.
Section 53, as amended, agreed to.
Sitting suspended at 12.10 p.m. and resumed at 2. p.m.
Sections 54 and 55 agreed to.
We now proceed to section 56. Amendment No. 84 is in the name of Deputy McCreevey. Deputy McDowell to formally move the amendment.