Written Answers Nos. 72-80
72. Deputy Ciara Conway asked the Minister for Finance his plans to bring the State contributory pension within the standard PAYE taxing procedures (details supplied); and if he will make a statement on the matter. [19421/13]
View answerThe proposal put forward is that the contributory State pension should be taxed at source by the Department of Social Protection (DSP), and I am advised by the Revenue Commissioners that they agree with the proposal. Furthermore, it was recommended in the Report of the Commission on Taxation in 2009. The current situation is that a pensioner is liable to pay tax through the Income Tax self-assessment system or is taxed through the PAYE system based on an adjustment of tax credits. The Department of Social Protection provides details electronically to Revenue of the recipients of a range of DSP payments and their pension amounts on a weekly basis, and this also includes details of increases and decreases in the pension payment.
I am advised that while the Revenue Commissioners agree with the proposal that tax should be deducted at source by DSP there are a number of issues for DSP that need to be considered and addressed before it could be introduced. It is clear that deduction at source is the most efficient way to collect the right amount of tax from pensioners who have sources of income other than the State pension.
73. Deputy Joanna Tuffy asked the Minister for Finance the tax yield from Capital Taxes (details supplied); and if he will make a statement on the matter. [19440/13]
View answerThe outturn yields from capital taxes (Capital Acquisitions Tax and Capital Gains Tax) in 2011 and 2012 as compared to the estimated yields for those years at Budget time are set out in the tables below.
Capital Acquisitions Tax
|
Year |
Budget estimate €m |
Outturn €m |
Deviation €m |
|
2011 |
250 |
244 |
-6 |
|
2012 |
295 |
283 |
-12 |
Capital Gains Tax
|
Year |
Budget estimate €m |
Outturn €m |
Deviation €m |
|
2011 |
410 |
416 |
+6 |
|
2012 |
355 |
414 |
+59 |
The outturn yield from capital taxes in any year as compared to the Budget estimate for that year will be determined by a number of variables aside from any changes introduced at Budget time, including movements in asset prices and, particularly in the case of Capital Gains Tax, the numbers of transactions and the behavioural impact on individuals of actual or anticipated changes in the tax treatment of those transactions.
74. Deputy Joanna Tuffy asked the Minister for Finance if he will provide an update on tax reliefs (details supplied); and if he will make a statement on the matter. [19451/13]
View answerI am informed by the Revenue Commissioners that the estimated cost to the Exchequer of all “legacy” property-related tax schemes in 2010, the latest year for which this information is available, was €327 million. It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return (Form 12) is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return (Form 11). The estimated relief claimed has assumed tax forgone at the 41% rate for 2010 in the case of individuals and 12.5% in the case of companies. The figures shown correspond to the maximum Exchequer cost in terms of income tax and corporation tax. Corresponding data cannot yet be provided for 2011 and 2012, as the tax returns for these years are either in the early stages of being filed or are not yet due.
I would like to remind the Deputy that Finance Act 2012 contained two measures related to property reliefs designed to reduce the ongoing cost of these schemes to the Exchequer and to eliminate it in as short a time as possible. With effect from 1 January 2012, a USC surcharge was introduced on all investors with annual gross incomes over €100,000. The surcharge applies at a rate of 5% on the amount of income sheltered by property reliefs in a given year and will be in addition to any normal USC payable on this income. This USC surcharge applies to all investors with this level of gross income regardless of whether they invested in Section 23 type investments or accelerated capital allowance schemes.
In addition, investors in accelerated capital allowance schemes will no longer be able to use any capital allowances beyond the tax life of the particular scheme where that tax life ends after 1 January 2015. Where the tax life of a scheme has ended before 1 January 2015 no carry forward of allowances into 2015 will be allowed. The delayed implementation of this measure is designed to give individuals time to adjust to the absence of the carry forward provision.
In relation to capital allowances in respect of capital expenditure on certain qualifying hospitals, the termination date for incurring qualifying expenditure was 31 December 2009. However, where certain conditions were met a later termination date of the 31st December 2013 may apply. There are now only two property based tax incentive schemes remaining in the tax code: the Mid-Shannon Corridor Tourism Infrastructure Investment scheme (only 80% of expenditure can qualify in certain areas) and the Qualifying Specialist Palliative Care Units scheme, which was not commenced.
All other such schemes have been terminated, subject to transitional arrangements for certain schemes where projects were already in the pipeline. However, due to their nature these reliefs continue to entail ongoing costs on the Exchequer in terms of tax foregone. Because of the nature of some of those reliefs, individuals have a right to claim them for a seven-year period. There are a number of legal considerations that would hinder the abolition of the reliefs during such run down periods.
I would like to assure the Deputy that the high earners’ restriction continues to apply to these legacy reliefs, and ensures that those subject to the full restriction pay a minimum effective rate of income tax of 30% in addition to USC, PRSI and the surcharges mentioned above, where applicable. The latest report from Revenue “Analysis of High Income Individuals’ Restriction 2010” which can be found at http://taxpolicy.gov.ie/wp-content/uploads/2012/07/High-Income-Individuals-Report-2010.pdf highlights the rates of tax paid by individuals subject to the restriction.
75. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the total number of investors and the gross cost to the Exchequer of Section 481 Film Tax relief in each year from 2002 to 2012; his estimate of the number of jobs supported by this scheme; and if he will make a statement on the matter. [19455/13]
View answerI am advised by the Revenue Commissioners that the information required by the Deputy is as follows:
S481 Film Tax Relief
|
Tax Year |
Tax Cost |
Number of Investors |
|
Euro m |
||
|
2002 |
21.65 |
2,235 |
|
2003 |
24.60 |
2,408 |
|
2004 |
19.5 |
1,888 |
|
2005 |
15.7 |
1,518 |
|
2006 |
36.4 |
3,464 |
|
2007 |
31.1 |
3,049 |
|
2008 |
32.8 |
3,200 |
|
2009 |
42.0 |
2,553 |
|
2010 |
65.3 |
3,877 |
|
2011 |
45.7 |
2,669 |
|
2012 |
58.3* |
3,319* |
*Cost and number of investors is provisional and may be revised
My Department published a review of section 481 Film Relief in 2012. Based on work undertaken for that review, I can advise the Deputy that the 57 film projects certified by the Revenue Commissioners in 2011 supported employment for crew, cast and extras of over 15,000 individuals.
76. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide the total amount of pre-guarantee/unguaranteed debt paid out since the bank guarantee up to March 2011, and from March 2011 to date, by category senior secured, senior unsecured, junior secured, junior unsecured, retail and corporate deposits, interbank deposits, other liabilities, including the payment schedules, dates and tranche amounts, and including recipients, where known; and if he will make a statement on the matter. [19458/13]
View answerThe Department of Finance does not collect information in the detail asked in this question. Furthermore, some of the information could not be collated due to data protection and commercial confidentiality requirements. However, I will collate as much information on these issues as possible under these headings and respond directly to the Deputy.
77. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question Nos. 275, 276, 277 and 278 of 16 April, 2013, if he will provide details of the way that the Irish Bank Resolution Corporation assets relating to the €15bn the National Assets Management Agency funding were estimated, including any external verification; and if he will make a statement on the matter. [19459/13]
View answerTo be clear, NAMA issued Senior Bonds totalling €12.928 billion to purchase the CBI’s remaining lending to IBRC under the Facility Deed. That lending is backed by a floating charge on the otherwise unencumbered assets of IBRC and supported by a Ministerial guarantee. This ended the CBI’s lending relationship with IBRC and NAMA became the largest creditor to the liquidation. The Special Liquidator is charged with discharging this loan, which was acquired by NAMA, through a valuation and sales process of the remaining assets of IBRC over the coming months. As the Deputy will be aware extensive work has been undertaken by both the former Board of IBRC and my officials in relation to the winding up of IBRC. The Deputy will appreciate it was not possible to fully engage with the bank or its management in relation to the liquidation in advance of the transaction as this would have triggered legal obligations for the directors of the bank. However, extensive information in relation to the assets and liabilities of IBRC was provided to and held by the Department of Finance as part of its normal engagement with the bank including the audited Annual and Interim financial reports and accounts for the periods prior to liquidation, loan loss and provisioning exercises, internal and external auditor reports, Board papers and presentations, monthly management reports, financial presentations and other information provided to officials as part of their normal interaction with the bank.
78. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question Nos. 275, 276, 277 and 278 of 16 April, 2013 if he will provide the balance sheet of the Irish Bank Resolution Corporation at the time of liquidation, and detail where each asset and liability has moved to; and if he will make a statement on the matter. [19460/13]
View answerThe latest balance sheet of IBRC can be found in the Bank’s last published Annual Report & Accounts as at 31 December 2011 and the 2012 Interim Accounts. The Special Liquidators are not in a position to provide any additional confidential commercially sensitive financial information as this could potentially have a detrimental impact on asset recovery.
79. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question Nos. 275, 276, 277 and 278 of 16 April, 2013 if he will indicate who incurs the loss if the Irish Bank Resolution Corporation assets securing the €15bn debt purchased by the National Assets Management Agency from the Central Bank realise less than €15bn when sold; and if he will make a statement on the matter. [19461/13]
View answerAs part of the role of the liquidators, the assets of IBRC will be valued independently before being sold. Any assets not sold to third parties (including loan counterparties and other financial institutions) at or above the valuation price will be sold to NAMA at the independent valuation. To be clear, NAMA issued Senior Bonds totalling €12.928bn to purchase the CBI’s remaining lending to IBRC under the Facility Deed. The process described above will establish if the value of IBRC’s assets are sufficient to cover the value of NAMA bonds issued. The outcome of this process will not be known, with any certainty, until the independent valuation and asset sale process has completed. If the value of the assets is insufficient to covers amounts due to NAMA then that shortfall will be compensated by the Exchequer. If the value of the assets is greater than €12.928bn then the surplus after NAMA has been paid will go to the other creditors of IBRC.
80. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question Nos. 275, 276, 277 and 278 of 16 April, 2013, the reason preferred creditors will be paid before debt purchased by the National Assets Management Agency from the Central Bank; and if he will make a statement on the matter. [19462/13]
View answerI have been advised by the Special Liquidators that the debt purchased by NAMA from the Central Bank is a claim debt secured by a floating charge over the assets of IBRC. The sales proceeds received through the sale of the Company’s assets will be used to repay the creditors of the Company subject to the normal legal priorities, as set out in the Companies Act’s. Once the costs of the liquidation have been paid payments will be made to those creditors who are classified as preferential creditors.
Section 285(7) of the Companies Act, 1936 (as amended) (“the Act”) provides that preferential debts shall “have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any property comprised in or subject to that charge”.
