Written Answers Nos. 72-84
72. Deputy Ciara Conway asked the Minister for Finance if probate on wills is subject to stamp duty; if stamp duty was imposed on probate, the amount it would realise for the Exchequer; and if he will make a statement on the matter. [35987/13]
View answer114. Deputy Kevin Humphreys asked the Minister for Finance if any stamp duty applies to probate; the projected yield from a 1% rate; and if he will make a statement on the matter. [36277/13]
View answerI propose to take Questions Nos. 72 and 114 together.
I am informed by the Revenue Commissioners that probate on wills is not subject to Stamp Duty. To estimate the potential yield from a Stamp Duty on probate, one would need to identify the value of all estates in probate, which is not possible from the data available at present. I am advised by my colleague, the Minister for Justice and Equality, that probate is a legal process whereby a grant of representation is issued by the High Court Probate Office or District Probate Registry in respect of a deceased person's estate. The grant of representation gives legal authority to a person or persons to access the estate and administer it in accordance with the law. The Probate Office is an office of the High Court and management of the courts is the responsibility of the Courts Service which is independent in exercising its functions under the Courts Service Act 1998.
Where a Grant of Representation in a deceased person’s estate is extracted, it is subject to a Court Fee. The Court Fee in question is calculated in accordance with the Supreme and High Court (Fees) Order (S.I. 239 of 2013) and is assessed on the basis of the value of the net estate of the deceased person. The Courts Service has advised that in 2012 fees of €1,860,967 were collected in respect of applications to the High Court Probate Office for Grants of Probate and administration. Details of the fee income collected in the 14 District Probate Registries are not readily available.
A Probate Tax on estates was introduced by Finance Act 1993. The tax treated the estate of a deceased person as an inheritance taken by the executors or administrators of the estate. The net estate – that is, the assets of the deceased valued at the date of death, less liabilities at the date of death and reasonable funeral expenses – was deemed to be an inheritance taken by the executors or administrators. The rate of Probate Tax applied to the net estate was 2%. One of the main difficulties with Probate Tax was that it had to be paid prior to the grant of probate or administration. As funds in an estate cannot be released until after the grant, the imposition of probate tax placed a severe cash-flow burden on executors or administrators of estates who, if other funds were not available, had to arrange borrowings to discharge the liability. In many cases, this caused hardship for estates that had no liquid assets and where sales of property took time. Probate Tax was abolished by Finance Act 2001.
Capital Acquisitions Tax (CAT) was introduced in 1976 and includes both gift tax and inheritance tax. CAT is an acquisitions tax that imposes a tax charge on individuals after they receive gifts or inheritances. The charge arises at a time when the person is in a position to pay the CAT on the gift or on the inheritance, because s/he is in possession of the benefit received. CAT is therefore considered a more appropriate form of taxation of inheritances. I do not intend to reintroduce a Probate Tax on estates or a Stamp Duty on probate. However the Deputies may be aware that the rate of CAT on inheritances has been increased from 20% in 1999 to the current rate of 33%, and the tax-free thresholds have been considerably reduced since 2009.
73. Deputy Ciara Conway asked the Minister for Finance the reason a non-means-tested State pension is fully exempt from the universal social charge; if the non-means-tested State pension was subject to the USC, the amount it would realise for the Exchequer; and if he will make a statement on the matter. [35989/13]
View answerThe position is that the Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. Payments that are made under the Social Welfare Acts are and have always been specifically excluded from liability to USC. Accordingly, all State contributory and non-contributory pensions are exempt from the charge. I would also draw the Deputy’s attention to the fact that certain payments, which are of a similar character to social welfare payments, are also exempt from universal social charge. A list of such payments is included at Appendix A, page 49, of the FAQs relating to the universal social charge published by the Revenue Commissioners and available at http://www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf.
To estimate the potential yield from applying the USC to non-means tested State Pensions i.e. the contributory State Pension and the State Pension (Transition) it would be necessary to identify certain details in respect of each recipient of social protection payments such as the individual amount of these payments received, the amount of any other income potentially liable to USC, the age of each individual and whether there was an entitlement to a medical card etc. This information would be essential to determine what rate of USC would apply at an individual level. It is possible that in many cases the rate would be low.
I am informed by the Revenue Commissioners that as they do hold or have access to the required information set out above, there is no basis on which an estimate of the yield from the change mentioned in the question could be compiled. However, by way of illustration, if for example, a 1 per cent levy was imposed on social protection contributory State Pensions and the State Pension (Transition) the full year yield to the Exchequer would be €41 million on the basis that the estimated provision for such payments in 2013 is approximately €4.1 billion. The estimate of Exchequer yield assumes that there is no exemption threshold, allowance or personal reliefs that could be used to offset against the levy.
74. Deputy Kevin Humphreys asked the Minister for Finance in respect of the 24 safety deposit boxes remaining in Irish Bank Resolution Corporation, if owners have been identified for them all; the length of time each box has been with either Anglo Irish Bank or Irish Nationwide; the gross value of the remaining contents; the period of time after which the contents come into the ownership of IBRC or the State; if any safety deposit boxes have gone missing; and the value of any contents that went missing; and if he will make a statement on the matter. [35991/13]
View answerAs indicated in my response of 9th July last I can confirm that there were 24 safety deposit boxes in use when the Special Liquidators were appointed to IBRC. The Special Liquidators are currently reconciling the safety deposit boxes to determine ownership. The operation and maintenance of the remaining safety deposit boxes in IBRC are an operational matter for the Joint Special Liquidators of the bank and I do not have a role in the matter.
75. Deputy Kevin Humphreys asked the Minister for Finance the number of safety deposit boxes remaining in Allied Irish Bank; if the Bank still offers this service; if any safety deposit boxes have gone missing; and if he will make a statement on the matter. [35992/13]
View answer76. Deputy Kevin Humphreys asked the Minister for Finance the number of safety deposit boxes remaining in Permanent TSB; if the Bank still offers this service; if any safety deposit boxes have gone missing; and if he will make a statement on the matter. [35993/13]
View answerI propose to take Questions Nos. 75 and 76 together.
The operation of safety deposit boxes is an operational decision for the individual institutions. As the Deputy is aware, I have no statutory function in relation to operational decisions made by individual lending institutions at any particular time. These are ultimately commercial decisions for the management team and board of each bank, having due regard to their customers and the impact on profitability. Notwithstanding the fact that the State is a shareholder, I must ensure that the banks are run on a commercial, cost effective and independent basis to ensure their value as an asset to the State, as per the Memorandum on Economic and Financial Policies agreed with the EU Commission, the ECB and the IMF. A Relationship Framework has been specified that defines the nature of the relationship between the Minister for Finance and each bank. These Frameworks were published on 30 March 2012 and can be found at; http://banking.finance.gov.ie/presentations-and-latest-documents/.
77. Deputy Kevin Humphreys asked the Minister for Finance if the Central Bank of Ireland still operates a vault; the contents in that vault; if the Central Bank of Ireland leases space in its vault to commercial operators; if the Central Bank of Ireland's gold holdings are held there; the current value of the Central Bank of Ireland's holdings of gold; and if he will make a statement on the matter. [35994/13]
View answer80. Deputy Kevin Humphreys asked the Minister for Finance if the new headquarters of the Central Bank of Ireland in the docklands include vaults; and if he will make a statement on the matter. [35997/13]
View answerI propose to take Questions Nos. 77 and 80 together.
The operation and maintenance of secure vaults is a matter for the Central Bank. For security reasons the Central Bank does not provide any details regarding the content or location of vaults. Gold receivables and gold for coin stocks are held by the Central Bank of Ireland; gold bars are held on behalf of the Central Bank of Ireland at the Bank of England. As at end May 2013, the value of gold and gold receivable assets of the Central Bank of Ireland was €242m. The Central Bank publishes the value of its gold and gold reserves in its annual report.
78. Deputy Kevin Humphreys asked the Minister for Finance the discussions he has held with the Bank of Ireland regarding the future use of the old Irish Parliament on College Green, Dublin; if he has considered raising with the bank any potential swap that can be carried out in order to acquire this historic building for the State; and if he will make a statement on the matter. [35995/13]
View answerI refer the Deputy to the previous responses of my colleague Minister Deenihan, who has had discussions with the Bank on this matter. In the context of these discussions, communications took place between his officials and mine and the subject may have come up in communicating with the Bank. However, no formal discussions took place between my Department and the Bank on the issue. Notwithstanding the fact that the State is a minority shareholder in Bank of Ireland, I must ensure that the bank is run on a commercial, cost effective and independent basis to ensure the value of the bank as an asset to the State, as per the Memorandum on Economic and Financial Policies agreed with the EU Commission, the ECB and the IMF. It is a matter for the board and management of the Bank to determine and implement operational policy in their organisation. The decision regarding the future use of this building is solely an operational decision for the bank and bearing in mind that the building is currently a very busy city centre branch of Bank of Ireland, this would be a factor in any decision of the Bank regarding the building’s future usage.
79. Deputy Kevin Humphreys asked the Minister for Finance the discussions he has held with the Central Bank of Ireland regarding the future use of its headquarters on Dame Street, Dublin; if he has raised the potential uses the State may make of the building including offering it in exchange to Bank of Ireland for the old Irish Parliament on College Green; and if he will make a statement on the matter. [35996/13]
View answerUnder section 6B of the Central Bank Act 1942, the Central Bank Commission is responsible for administrating the provision of accommodation and the acquisition and disposal of land by the Central Bank. I have no role in the matter. I have been advised that it is the intention of the Central Bank to develop disposal proposals for the future use of its headquarters on Dame Street, Dublin. Due regard will be given to the public interest and maximising the return to the Central Bank in decision making around the future of its headquarters. The Central Bank will consider all proposals for the future use of the building, taking into account that this is a valuable asset that should give maximum return so that the Central Bank can continue to return a portion of its profit to the Exchequer.
81. Deputy Ciara Conway asked the Minister for Finance if there are plans to move the Social Insurance Fund from his Department to the Department of Social Protection; and if he will make a statement on the matter. [35998/13]
View answerI would first of all stress that the administration of the Social Insurance Fund (SIF) is already the responsibility of the Minister for Social Protection and has been since the SIF was established in 1952. I have no role in the day-to-day running of the SIF. While I have responsibility for the investment account of the SIF, the fund has been in receipt of Exchequer subvention in recent years, since the middle of 2010, and this will likely continue for the foreseeable future. Further, the management of the investment account was delegated to the NTMA. As such, I currently have limited engagement with the SIF.
82. Deputy Kevin Humphreys asked the Minister for Finance the cost of providing tax relief at the marginal rate in 2012 on contributions to pension savings, including employees' contributions to approved superannuation schemes, retirement annuity premiums and personal retirement savings accounts; and what the accrual to the Exchequer would be by reducing these reliefs to the standard rate; and if he will make a statement on the matter. [36006/13]
View answerThe following tables provide a breakdown of the estimated cost of tax and PRSI reliefs relating to private pension contributions for 2008, 2009 and 2010, the latest year for which the most up-to-date data is available. Figures of the numbers availing of the tax reliefs are also provided, where available. Tax relief on employee or individual contributions is allowed at the taxpayer’s marginal rate of tax subject to limits based on annual earnings and age. Figures have been rounded where appropriate.
A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans - retirement annuity contracts and personal retirement savings accounts - by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full-year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts, and confining tax relief for the Public Service pension related deduction to the standard rate of 20%, would be approximately €560 million. This estimate includes €90 million in respect of the Public Service pension related deduction.
This estimate does not allow for possible behavioural changes that could arise from a change in the rate of relief.
2008
|
Estimate of the cost of certain tax reliefs for private pension provision |
Estimated costs € million |
Nos. availing |
|
Employees' Contributions to approved Superannuation Schemes |
655 |
792,600 |
|
Employers' Contributions to approved Superannuation Schemes |
165 |
362,700 |
|
Estimated cost of exemption of employers’ contributions from employee BIK |
595 |
362,700 |
|
Retirement Annuity Contracts (RACs) |
353 |
116,000 |
|
Personal Retirement Savings Accounts (PRSAs) |
74 |
53,900 |
|
Estimated cost of PRSI and Health Levy relief on employee contributions |
255 |
Not available |
2009
|
Estimate of the cost of certain tax reliefs for private pension provision |
Estimated costs € million |
Nos. availing |
|
Employees' Contributions to approved Superannuation Schemes |
730 |
713,600 |
|
Employers' Contributions to approved Superannuation Schemes |
155 |
342,200 |
|
Estimated cost of exemption of employers’ contributions from employee BIK |
560 |
342,200 |
|
Retirement Annuity Contracts (RACs) |
237 |
101,300 |
|
Personal Retirement Savings Accounts (PRSAs) |
77 |
56,200 |
|
Estimated cost of PRSI and Health Levy relief on employee contributions |
230 |
Not available |
2010
|
Estimate of the cost of certain tax reliefs for private pension provision |
Estimated costs € million |
Nos. availing |
|
Employees' Contributions to approved Superannuation Schemes |
600 |
625,100 |
|
Employers' Contributions to approved Superannuation Schemes |
140 |
302,900 |
|
Estimated cost of exemption of employers’ contributions from employee BIK |
515 |
302,900 |
|
Retirement Annuity Contracts (RACs) |
180 |
82,200 |
|
Personal Retirement Savings Accounts (PRSAs) |
73 |
52,300 |
|
Estimated cost of PRSI and Health Levy relief on employee contributions |
230 |
Not available |
83. Deputy Kevin Humphreys asked the Minister for Finance if there has been any analysis of the way a tax on land might be implemented to complement the other taxes on property and provide a funding stream for local authorities; the amount that would be raised for the Exchequer were a charge of €10 per hectare applied to arable or productive land assets, assuming that 4.6 million hectares are in use for agriculture and 750,000 hectares are in forestry; and if he will make a statement on the matter. [36007/13]
View answerFunding for local authorities is a matter for my colleague, the Minister for the Environment, Community and Local Government. I am advised by the Revenue Commissioners that they have no specialised knowledge of nationwide land values apart from land that is part of transactions for Capital Acquisitions Tax (CAT), Capital Gains Tax (CGT) and Stamp Duty purposes. Using the figures supplied by the Deputy, a charge of €10 per hectare on 4.6 million agricultural hectares and 750,000 forestry hectares, a total of 5.35 million hectares, would have a potential yield of €53.5 million, assuming no reliefs or exemptions and full compliance with the tax. A flat tax on land as outlined by the Deputy does not take into account the market value or quality of the land in question. It would apply to poor land with a lower market value and to forestry holdings at the same rate per hectare as to top quality arable land in productive areas.
CAT, CGT and Stamp Duty apply in different circumstances to transfers of land. These rates of CAT and CGT have increased in recent years and the tax-free thresholds for CAT have been significantly reduced. Although the rates of Stamp Duty on property transactions have reduced, many exemptions and reliefs from Stamp Duty have been abolished. The market value of property is taken into account in all three taxes. I have no plans to introduce a flat tax on agricultural land and land under forestry.
84. Deputy Kevin Humphreys asked the Minister for Finance in relation to the recommendations of the Commission of Taxation report in 2009, if he will indicate which have been implemented; if he will list which recommendations his Department will not be implementing or have yet to implement; and if he will make a statement on the matter. [36008/13]
View answerThe Report of the Commission has been a significant element in the framing of the Budgets and Finance Acts introduced by this Government. However the Deputy should note that it is only one element, albeit an important one, in the policy making process. Therefore I would draw his attention to the papers of the Tax Strategy Group, published every year on my Department’s tax policy website, http://taxpolicy.gov.ie.
The Papers relating to Budget 2013 have just been published and include a specific Paper on tax incentives and expenditures which focuses very much on the recommendations of the Commission in relation to tax expenditures. This Paper outlines the significant progress made in an area of particular concern to the Commission, which made over one hundred recommendations here.
Many other recommendations made by the Commission have contributed to the changes to taxation policy introduced by this Government and I would remind the Deputy that Ireland has been consistently assessed highly by the OECD for the progressivity of our taxation system. In a PQ reply it is impractical to list all the measures introduced since the advent of this Government but some of the key developments include:
- The introduction of a Carbon Tax;
- The introduction of a Residential Property Tax;
- The maintenance of the Corporation Tax rate;
- Additional support for economic activity and
- Measures to combat the shadow economy.
All of these are in line with Commission recommendations.
