Dáil Éireann Debate, Thursday - 18 July 2013
189. Deputy Patrick Nulty asked the Minister for Finance if he supports treating discretionary trusts as see through vehicles with the beneficiary taxable when the assets are placed into the trust; and if he will make a statement on the matter. [36739/13]
View answer190. Deputy Patrick Nulty asked the Minister for Finance if he supports establishing a public database of all discretionary trusts registered here; and if he will make a statement on the matter. [36740/13]
View answerI propose to take Questions Nos. 189 and 190 together.
Discretionary trusts may be set up for a variety of purposes, including:
- for public or charitable purposes,
- for the benefit of individuals who are incapable of managing their affairs because of physical, mental or legal incapacity or
- to provide for minor children.
The creation of a public data base of discretionary trusts, as well as the level of detail which would be disclosed on such a database, gives rise to questions around the right to privacy and data protection. These are matters for consideration by my colleague the Minister for Justice and Equality.
There is a special tax regime applicable to discretionary trusts which, depending on the circumstances, can include an initial discretionary trust tax levy of 6% and an annual levy of 1% of the value of the property subject to a discretionary trust. In addition, income tax and capital gains tax may arise on income and gains arising to the trustees of a discretionary trust. There would be practical difficulties in designing an equitable basis for taxing the beneficiaries of many discretionary trusts. This is because specific beneficiaries may not be identified in all cases, since the trustees may have discretion as to which specific beneficiaries out of a class of beneficiaries will benefit from the trust.
Should it be brought to my attention that further measures are required to counter any particular unacceptable features of discretionary trusts, or to strengthen the powers of the Revenue Commissioners to obtain information in relation to the operation of discretionary trusts, I will consider the matter.
