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Tax Code.

Dáil Éireann Debate, Wednesday - 15 December 2004

Wednesday, 15 December 2004

Questions (138, 139, 140)

Joan Burton

Question:

145 Ms Burton asked the Minister for Finance if he will set out the numbers of discretionary trusts notified to the Revenue Commissioners for tax purposes for each year from 1998 to date; the numbers of persons identified as beneficiaries of such trusts for each year from 1998 to date; the capital value of assets transferred to such trusts each year from 1998 to date; and if he will distinguish for each year from 1998 to date, the amount of the 1% levy included in the taxation levied on the assets of such trusts as distinct from the taxation levied on the establishment of such trusts from each year 1998 to date. [33775/04]

View answer

Written answers

I am informed by the Revenue Commissioners that the total yield from discretionary trust tax for the years 1998 to 2003 is as set out in table 1 below. I am also advised that the specific information requested by the Deputy regarding such trusts — number of notifications, beneficiaries, the capital value of assets transferred and the breakdown between the 1% annual tax and the 6% initial charge for each year since 1998 — is not readily available and either could not be obtained, or could not be obtained without conducting a protracted investigation of the Revenue Commissioners' records. However, some of the information requested, namely, the number of notifications and number of related beneficiaries, is available with regard to the larger trusts now dealt with in Revenue's large cases division and this is set out in table 2 below.

A number of discretionary trusts are not liable to discretionary trust tax, for example, because the settlor is still alive or because a beneficiary is under the age of 21 years.

Table 1: Discretionary Trust Tax — Total Yield

1998

1999

2000

2001

2002

2003

€10.671 million

€13.460 million

€15.272 million

€11.028 million

€4.307 million

€53.502 million*

* The 2003 figure includes a significant amount of tax in respect of several preceding years.

Table 2: Discretionary Trusts dealt with in Large Cases Division

1998

1999

2000

2001

2002

2003

Number of discretionary trusts notified

9

8

8

7

6

8

Number of related beneficiaries

10

39

37

35

51

38

Joan Burton

Question:

146 Ms Burton asked the Minister for Finance if beneficiaries of income from the assets of discretionary trusts, both adults and children are entitled to full personal tax allowances and credits in respect of income tax levied on income received by them from such trusts; the number of beneficiaries of such income from discretionary trusts for each year from 1998 to date; a breakdown of beneficiaries as between adults and children for each year from 1998 to date; and the amount of personal allowances of credits claimed in respect of income from such trusts and the amount of tax levied on such income received by trust beneficiaries. [33776/04]

View answer

I am informed by the Revenue Commissioners that adults and children with income within the charge to income tax are treated in like manner for income tax purposes. Individuals liable to income tax in a tax year, not only on trust income but also on other income, are entitled to the full tax allowances, deductions, reliefs and personal tax credits as provided for in tax law.

In certain circumstances, the income paid to a child by a trust is deemed, for income tax purposes, to be that of the settlor, for example, the parent, of the trust and, where this is the case, it is the settlor rather than the child who is liable to income tax on that income.

As regards the statistics requested by the Deputy, I am further informed by the Revenue Commissioners that income from the assets of discretionary trusts is aggregated in tax returns with other forms of income and cannot be separately distinguished. There is, therefore, no statistical basis on which an estimate of the statistics requested can be provided.

Cecilia Keaveney

Question:

147 Cecilia Keaveney asked the Minister for Finance if tax relief is available for persons who reside in the Republic, work in Northern Ireland and have had orthodontic treatment carried out in Republic; and if he will make a statement on the matter. [33785/04]

View answer

I am informed by the Revenue Commissioners that tax relief is available, under the heading of health expenses, on certain qualifying dental expenses as set out below. Qualifying expenses include those in respect of orthodontic treatment. However, the relief is available only against tax that is actually paid in the State and only to the extent that tax has been paid. Cross-Border workers whose only source of income derives from a Northern Ireland employment exercised in the North and who pay UK tax only cannot obtain tax relief in the State on health expenses because no Irish tax has been paid. If, however, Irish tax has been paid on employment or other income, tax relief for qualifying health expenses may be due against the Irish tax paid.

Where a married couple on joint assessment are both working with one spouse employed in the State and the other in Northern Ireland, the spouse who pays income tax in the State would be entitled to claim relief on the costs of certain qualifying dental expenses incurred by his or her spouse.

As regards tax relief under the general heading of health expenses, the relief may be claimed by an individual in respect of expenditure incurred on his or her own behalf or on behalf of his or her spouse and dependants. The relief is granted at the highest rate of tax at which the taxpayer is chargeable for the year of the claim. The person must bear the first €125 of expenses in any one year himself or herself or the first €250 if claiming relief in respect of two or more persons.

Tax relief cannot be claimed in respect of any expenditure which has been or will be reimbursed to the individual or where a compensation payment has been or will be made in respect of such expenditure.

To claim tax relief in respect of dental work the individual should submit to his or her tax office a completed health expenses claim form known as Form Med 1. This is to be completed by the individual making the tax claim. In addition, a completed Form Med 2 is to be completed by the dentist who carried out the dental work.

Routine dental care does not qualify for tax relief, that is, tax relief is not available for the cost of scaling, extraction and filling of teeth and the provision and repair of artificial teeth and dentures.

The following specialised dental treatments qualify for tax relief:

Description

Bridgework

Dental treatment consisting of an enamel-retained bridge or a tooth-supported bridge.

Crowns

These are restorations fabricated outside the mouth and are permanently cemented to existing tooth tissue.

Tip replacing

This is regarded as a crown where a large part of the tooth needs to be replaced and the replacement is made outside the mouth.

Veneers- Rembrant Type Etched Fillings

These are a form of crown.

Endodontics — Root Canal Treatment

This involves the filling of the nerve canal and not the filling of teeth.

Gold Inlays

These are a smaller version of a gold crown (only allowable if fabricated outside the mouth).

Gold Posts

These are inserts in the nerve canal of a tooth, to hold a crown.

Orthodontic Treatment

This involves the provision of braces and similar treatments.

Periodontal Treatment

Root planing — a treatment of periodontal (gum) disease; currettage and debridement — part of root planing; gum flaps — a gum treatment; chrome cobalt splint — if used in connection with periodontal treatment (if it contains teeth, relief is not allowable); dental implants following treatment of periodontal (gum) disease, which included bone grafting and bone augmentation.

Surgical Extraction of Impacted Wisdom Teeth

Relief is allowable when undertaken in a hospital or by a dentist in a dental surgery. Certification from the hospital or dentist will be required to obtain tax relief. The removal of teeth in any other circumstances does not qualify.

Further information regarding tax relief under the heading of health expenses is available on the Revenue website at www.revenue.ie.

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