Written Answers Nos. 178-201
178. Deputy Pearse Doherty asked the Minister for Finance his views on whether the International Accounting Standards Board has given clear and precise instructions on the way banks should account for loan losses; and if he will make a statement on the matter. [3567/14]
View answer179. Deputy Pearse Doherty asked the Minister for Finance if banks must recognise expected losses immediately; or if they can delay their recognition in their accounts; and if he will make a statement on the matter. [3568/14]
View answer180. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 164 of 15 January 2014, if he will clarify the powers the Central Bank of Ireland has, under the European Communities (Credit Institutions: Accounts) Regulations 1992, SI 294 of 1992, to ensure that banks implement the International Accounting Standards Board framework; and to ensure that banks do not overvalue assets by delaying the recognition of losses. [3569/14]
View answer181. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 164 of 15 January 2014 if banks have systematically overvalued loans in their published accounts between 2005 and to date in 2014 in a way permissible under International Accounting Standards Board rules; and if he will make a statement on the matter. [3570/14]
View answerI propose to take Questions Nos. 178 to 181, inclusive, together.
By virtue of Regulation 15(1)(b) of the European Communities (Credit Institutions: Accounts) Regulations 1992, (S.I. 294 of 1992) (1992 Regulations) the Central Bank of Ireland (Central Bank) may bring and prosecute an offence under the 1992 Regulations.
Regulation 5(1) permits a company to prepare financial statements in accordance with Section 149 of the Companies Act, 1963 (referred to as Companies Act individual accounts) or in accordance with the International Financial Reporting Standards in accordance with Section 149A of the Companies Act, 1963 (referred to as IFRS individual accounts). With respect to IFRS individual accounts, Regulation 5(1B) sets out specific disclosures that are required to be included in addition to those specified by the International Financial Reporting Standards themselves. None of these additional requirements relate to the implementation of the IASB Framework.
The requirement for banks to prepare financial statements is laid out in the Companies Acts, 1963-2013. The Central Bank of Ireland has no role in the enforcement of the Companies Acts. The Companies Acts come under the scope of the Department for Enterprise, Trade and Innovation. The Director of Corporate Enforcement has widespread powers and functions in relation to potential breaches of the Companies Acts.
I informed the Deputy in a reply on 15 January that I did not accept the premise that Irish banks have systemically overvalued loans in their published accounts. The valuation of loans is a matter of judgement on the part of the banks and auditors.
The auditors of any company - including the banks - are required as part of the audit process, to confirm that the financial reporting framework used in the preparation of the financial statements is in compliance with Irish law and International Financial Reporting Standards, as issued by the International Accounting Standards Board. Companies are also required to disclose in the financial statements their accounting policies which covers the detail of how individual items are accounted for. Listed companies in the EU are required to comply with the International Financial Reporting Standards and their auditors are required to provide a separate opinion in relation to the application of the standards as part of the audit report which is included in the financial statements.
182. Deputy Pearse Doherty asked the Minister for Finance if some banks may have mislead the National Asset Management Agency about the value of assets transferred to it through the exclusion of expected losses; and if he will make a statement on the matter. [3571/14]
View answerI am advised that the loan valuation process which was adopted to conform with the provisions of Part 5 of the NAMA Act was very thorough and required the provision of extensive supporting documentation from the participating institutions. As the Deputy may be aware, valuations were not set by NAMA or by the institutions. Property valuations were set by independent valuers, reviewed by NAMA-appointed valuers and, in cases of dispute, new valuations were provided by third-party valuers. Likewise, any legal due diligence carried out on behalf of the institutions was subject to review by NAMA-appointed solicitors. Finally, loan valuations were carried out by five independent firms and their work was also reviewed by an Audit Co-ordinator appointed by NAMA. Given the numerous independent checks and balances in the process, I am advised that it would have been extremely difficult to manipulate the actual value of assets.
183. Deputy Mary Lou McDonald asked the Minister for Finance further to Parliamentary Question No. 144 of 15 January 2014, if he will provide, in tabular form and year-on-year, the occasions on which he has signed-off on the awarding of added years to public sector workers, between January 2011 and December 2013; the grade of the persons awarded the added years; and the number of added years awarded in each instance. [3593/14]
View answerNo individual in my Department has been awarded added years under the Professional Added Years Scheme or as a result of abolition of office (Section 6 of the Superannuation Act 1909 and Sections 6 and 7 of the Superannuation and Pensions Act 1963 refer). All matters in relation to the policy and/or administration of pensions (including added years on the grounds of ill-health retirement) for Department of Finance staff falls within the remit of the Pensions area of the Department of Public Expenditure and Reform, and final decisions on any award of added years rests with that Department.
184. Deputy Pearse Doherty asked the Minister for Finance the number of staff at all of the covered banking institutions, the National Treasury Management Agency and National Asset Management Agency in the year 2013 on a total remuneration package, including pension payments, allowances and benefits of between €100,000 and €200,000, between €200,000 and €300,000 and between €300,000 and €400,000, and the number on more than €500,000. [3597/14]
View answerAs the Deputy will be aware the Review of Remuneration Practices & Frameworks at the Covered Institutions (the "Mercer Report") was published by my Department on 12 March 2013. The following breakdown of total salary and remuneration appears on page 43 of that review.
|
|
AIB |
AIB |
BOI |
BOI |
|
Number of staff |
Salary |
Remuneration |
Salary |
Remuneration |
|
€300,000 - €399,999 |
7 |
11 |
20 |
34 |
|
€400,000 - €499,999 |
3 |
11 |
12 |
15 |
|
€500,000 or over |
0 |
0 |
6 |
11 |
Note 1: There are differences in data methodology, timing and exchange rates which account for differences in the data presented here and that shown in responses to parliamentary questions. Data for PTSB and IBRC is not shown for reasons of data protection. There is a whole host of additional disclosures in the report that give further detailed breakdowns of pay across the banks, in particular the chart on page 42 and the table on page 46 which shows a breakdown by institution by grade of the number of staff, their salary and total remuneration as follows -
|
- |
|
AIB |
BoI(2), |
IBRC |
PTSB |
|
Chief Executive |
Number of employees |
1 |
1 |
1 |
1(4) |
|
Salary |
€425,000 |
€623,000(3) |
€500,000 |
€400,000 |
|
|
Total Remuneration |
€488,800 |
€776,400 |
€683,600 |
€460,000 |
|
|
Senior Executives (1) |
Number of employees |
8 |
8 |
7 |
9 |
|
Salary |
€327,200 |
€408,3003 |
€365,100 |
€209,300 |
|
|
Total Remuneration |
€434,200 |
€517,400 |
€535,700 |
€269,600 |
|
|
Executives |
Number of employees |
118 |
103 |
46 |
20 |
|
|
Salary |
€174,800 |
€198,700 |
€184,100 |
€173,900 |
|
|
Total Remuneration |
€230,100 |
€251,800 |
€253,900 |
€220,100 |
|
Senior Manager / Manager |
Number of employees |
2,199 |
3,326 |
291 |
271 |
|
|
Salary |
€87,100 |
€76,800 |
€87,200 |
€83,000 |
|
|
Total Remuneration |
€108,300 |
€96,600 |
€115,600 |
€109,200 |
|
Assistant Manager / Senior Specialist |
Number of employees |
3,508 |
2,405 |
219 |
554 |
|
|
Salary |
€51,500 |
€49,800 |
€55,100 |
€52,700 |
|
|
Total Remuneration |
€62,300 |
€61,200 |
€61,900 |
€65,200 |
|
Senior Clerical / Specialist |
Number of employees |
1,584 |
3,617 |
237 |
518 |
|
|
Salary |
€44,100 |
€41,800 |
€40,400 |
€43,800 |
|
|
Total Remuneration |
€54,600 |
€49,900 |
€45,100 |
€54,900 |
|
Clerical |
Number of employees |
7,034 |
4,789 |
200 |
982 |
|
|
Salary |
€32,600 |
€29,600 |
€31,300 |
€30,000 |
|
|
Total Remuneration |
€37,300 |
€35,800 |
€34,500 |
€34,400 |
Notes:
1 The Leadership Team in AIB.
2 US employees are not included in the corporate grading structure and are therefore not included in this analysis.
3 Salary figures are net of a voluntary waiver where applicable.
4 2012 Chief Executive data extracted from responses to recent Parliamentary Questions.
Remuneration of NTMA employees (including taxable benefits) as at end December 2013 is set out below. All NAMA staff are employees of the NTMA and under Section 42 of the National Asset Management Agency Act 2009, the NTMA assigns staff to NAMA. NAMA reimburses the NTMA the costs of staff assigned to NAMA.
|
NTMA Remuneration as at 31 December 2013 (post FEMPI reductions) |
|||
|
|
NTMA (ex NAMA) |
NAMA |
Total |
|
Up to €100,000 |
258 |
223 |
481 |
|
€100,001 to €200,000 |
57 |
105 |
162 |
|
€200,001 to €300,000 |
8 |
2 |
10 |
|
€300,001 to €400,000 |
1 |
2 |
3 |
|
€400,001 to €450,000 |
1 |
0 |
1 |
|
Total |
325 |
332 |
657 |
The figures above exclude pension contributions. The Public Service Pension Deduction is applied to NTMA employees. NTMA employees are members of the NTMA defined benefit superannuation scheme or else have Personal Retirement Savings Accounts. The pension benefits of members of the NTMA superannuation scheme prior to 1 January 2010 are based on final salary. The pension benefits of members who joined the scheme on or after 1 January 2010 are based on career average earnings. Unlike most public pension schemes which are funded on a pay as you go basis, the NTMA superannuation scheme is a funded scheme. Pension entitlements are within the standard entitlements in the model public sector defined benefit superannuation scheme. Pension contributions are not paid to individual employees they are paid into the scheme. The level of potential pension payments to members is dependent on length of service, based on final salary or career average earnings, with 1/80th of salary accruing for each year of service.
The banks will provide updated remuneration disclosures in their 2013 financial statements which will be issued in the coming months.
185. Deputy Gerry Adams asked the Minister for Finance if he will provide in tabular form the number of JobBridge interns taken on in County Louth in his Department from September 2013 until January 2014. [3606/14]
View answerMy Department does not have a presence in County Louth, and consequently has not taken on any JobBridge interns in that area.
186. Deputy Eoghan Murphy asked the Minister for Finance if Permanent TSB used public procurement processes in engaging consultants; and the consulting spend in the past 24 months. [3653/14]
View answerPermanent TSB ("PTSB") is not legally required to comply with public procurement rules but it has informed me that it follows industry best practice in relation to procurement in that all large consultancy assignments are subject to competitive tenders, detailed contract negotiations and appropriate governance, including Board approval.
As the Deputy may be aware PTSB has undertaken a wide variety of projects in the past two years including, inter alia, a rebuilding of its arrears management capability, the development of a Restructuring Plan, the separation from Irish Life and the recruitment of a new management team. I am informed by PTSB that this has led to an increased requirement for third party expertise including the use of consultants.
PTSB's 2012 Annual Report and Financial Statements, published on their website, set out in detail the level of Restructuring Costs incurred during 2012, including:
- €14 million of costs associated with proposed asset disposal initiatives, separation of the Irish Life Group and the final phase of the 2011 transformation project
- €53 million of costs associated with professional and contractor projects in relation to the restructuring of the group
In addition 2012 Operating Costs included €9 million of consulting costs.
I am advised by PTSB that it is currently in a close period and it is not appropriate to disclose information relevant to its financial performance in 2013 at present. PTSB has informed me that this information will be included in PTSB's Annual Report and Financial Statements which will be published in March 2014. PTSB has advised me that the level of spend on Restructuring Costs is significantly reduced in 2013 compared to 2012.
As the Deputy will be aware there is a Relationship Framework in place with PTSB. Under the Relationship Framework PTSB is recognised as a separate economic unit with independent powers of decision. The Board and management team retains responsibility and authority for determining the bank's strategy and commercial policies and conducting its day-to-day operations.
187. Deputy Eoghan Murphy asked the Minister for Finance the number of persons paying PAYE in 2012 but who did not file an income tax return for that year. [3657/14]
View answerI am advised by the Revenue Commissioners that a PAYE taxpayer is regarded, generally, as an individual whose:
- Main source of income is taxed within the PAYE system and
- Non-PAYE income (if any) e.g. rental income, dividends, etc. is taxed by reducing their tax credits and tax rate bands, and
- Gross non-PAYE income is less than €50,000 and their net non-PAYE income (if any) is €3,174 or less.
At the end of 2012, there were approximately 2.3 million individuals taxed under the PAYE system on some or all of their income, representing about 1.7 million cases, when account is taken of the joint assessment basis.
The Deputy will be aware that the PAYE system has been designed so that by the end of each tax year in most instances the correct amount of tax will have been deducted and they will neither be due a refund of tax nor owe any tax. PAYE taxpayers, therefore, are not required to complete an annual tax return (Form 12 for PAYE taxpayers) unless they are requested to do so by an Inspector of Taxes under Section 879 Taxes Consolidation Act 1997. They are entitled, if they so wish, to submit a Form 12 Return of their own volition which a number of PAYE taxpayers do annually, principally in the context of a change in circumstances or to claim a tax credit or a tax refund.
I am further advised that to date approximately 34,500 tax returns have been received from PAYE taxpayers as defined above in respect of the year 2012.
However, many people taxed under PAYE are also taxed under the self-assessment system for example because they have additional income sources or are jointly assessed with a self assessed individual. These taxpayers are required under the Taxes Consolidation Act to complete an annual tax return (Form 11). To date, almost 254,000 cases with a PAYE income have completed a Form 11 for 2012.
The Commissioners also inform me that they are planning to release an online Form 12 for PAYE taxpayers during the first half of 2014.
188. Deputy Eoghan Murphy asked the Minister for Finance the reason it was decided not to combine an annual income tax return with a property tax return. [3658/14]
View answerI am informed by the Revenue Commissioners that the introduction of the Local Property Tax (LPT) in 2013 was the largest extension of self-assessment in the history of the State, with over 1.3 million taxpayers obliged to file LPT Returns and pay the tax. Given the significant numbers to whom the new tax applied, its introduction needed to be carefully planned and considered, particularly as respect the obligations on property owners to self-assess the value of their property, file the appropriate tax return and make their payment of tax. This had to be achieved in the very challenging timeframe set for Revenue by the Government.
There are several reasons why a single tax return for both income tax and LPT was not considered practical when LPT was being introduced. The Deputy will be aware that the Government decided in July 2012 that LPT was to commence in 2013 on a half-year basis. The LPT 1 return filing date in 2013 of 7 May 2013 (or 28 May, for online filers) was specifically chosen because it allowed the various administrative arrangements for different aspects of LPT, including the range of payment options provided by Revenue, to be put in place before the 2013 LPT payment due date of 1 July 2013. The Deputy will be aware that the Income Tax return filing date for those taxpayers who were required to file a 2012 income tax return was 31 October 2013 and if LPT declarations were included in this return, it would have made the introduction of a half-year LPT charge for 2013 impossible.
Another issue that makes the Deputy s suggestion impractical is that residential property owners who are obliged to file an LPT1 Return, are not necessarily obliged to file an Income Tax return. For example, the vast majority of PAYE customers, the unemployed, non-residents and those in receipt of the State pension are not obliged to file an annual return of income, where they have no other taxable income sources. Moreover, the LPT legislation requires that only one LPT Return should be filed for a property so where there are multiple owners of a property, the designated liable person is responsible for filing the LPT Return and paying the tax. In many instances of multiple properties, I am advised by Revenue based on analysis they have conducted on LPT Returns filed to date, the designated liable person is not obliged to file an Income Tax Return.
The Revenue Commissioners have a strong track record in simplifying the administrative processes, as far as they possibly can, for all of the taxes and duties for which they have responsibility. In the administration of LPT, Revenue has sought to make it as easy as possible for residential property owners to understand and comply with their LPT obligations. This strategy has been very successful as evidenced by the compliance rate of 91% achieved for 2013.
I am satisfied that combining the LPT Return with the annual Income Tax Return would not have proved beneficial to the taxpayer or to Revenue. In fact, it would have placed an unnecessary, additional compliance burden on some taxpayers, most likely increased the number of customer contacts for Revenue and potentially compromised the excellent voluntary compliance levels that have been achieved.
Finally, as I have set out above, introducing a single return, even on a limited basis, to cater for Income Tax and LPT would require a significant restructuring of either the Income Tax or LPT provisions and I am do not believe that the impact of such changes would be justified for any potential benefits.
189. Deputy Eoghan Murphy asked the Minister for Finance if he will report on those controls within his Department for the management of data and files on all records relating to departmental and Government decisions; the changes introduced in 2011 to ensure the completeness of such records; and if the systems now in place are to be audited on a regular basis to ensure they are working. [3663/14]
View answerIn response to the Deputy question my Department has a comprehensive set of guidelines in place in relation to record management within the Department. Following a recent internal audit process the guidelines were reissued to all staff members in March 2013 to insure that all members of staff were brought up to date with the file management procedures in operation within the Department. The procedures outline to staff what records should be kept on official files, how to register official files on the Departments file management system and how to manage files that are in current use within their section. It also advises staff on how to manage e-mailed correspondence.
Each Division within the Department has been assigned specific file series which they use to register official files on the Department file tracking system and it is the responsibility of each Division within the Department to ensure that Departmental decisions and Government decisions effecting the work of the Department are recorded on the appropriate official file to ensure that any following up action to be taken on foot of such decisions is available for future reference.
190. Deputy Nicky McFadden asked the Minister for Finance if alternatives for financial support are available to single parents who have been affected by the replacement of the one-parent family tax credit with the single person child care credit; if he will provide further information on the option to allow the credit to be used by a non-primary carer in situations where the primary carer has no tax liability; and if he will make a statement on the matter. [3704/14]
View answerThe Department of Social Protection has a range of payments to assist families and individuals in financial difficulties including Family Income Support, One Parent Family Payment, Supplementary Welfare and Rent Supplement.
The One-Parent Family Credit ceased with effect from 31 December 2013 and was replaced by the Single Person Child Carer Credit, (SPCCC), which is applicable from 1 January 2014. However, the new credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child.
As a result of an amendment which I brought forward at Committee stage of the Finance Bill, a primary carer who is entitled to the credit and who does not wish to avail of it can choose to surrender it. A secondary carer may then make a claim for the credit, provided that the qualifying child resides with him or her for not less than 100 days in the tax year. It should be noted that where a primary carer is married, in a civil partnership or cohabiting they would not be entitled to the new credit (or indeed the former one). In such circumstances the primary carer cannot relinquish the credit to a secondary carer. In addition, a secondary carer who is married, in a civil partnership or cohabiting, would not be entitled to the new credit (or indeed the former one) regardless of the marital status of the primary carer.
Further detail on the operation of the new credit, including a series of frequently asked questions, is available on the Revenue Commissioners website at; http://www.revenue.ie/en/tax/it/credits/single-person-child-carer-credit.html.
191. Deputy Bernard J. Durkan asked the Minister for Finance if the Revenue Commissioners will review the level of payment required or period within which payment is required in the case of persons (details supplied) in County Kildare; and if he will make a statement on the matter. [3709/14]
View answerAs the Deputy will be aware from my replies to his previous Questions of 24 September 2013 (Dáil Question No. 39398/13), 21 November 2013 (Dáil Question No. 49879/13) and 10 December 2013 (Dáil Question No. 52942/13) the Revenue Commissioners have already carefully considered this matter. Specifically, the Revenue Commissioners wrote to the person concerned on 5 September 2013 offering him the opportunity of agreeing to a compromise penalty arrangement.
I am advised that a reply from the person, which was received over two months late on 19 December 2013, has also been considered but the Commissioners concluded that the information provided relating to vehicle ownership does not constitute grounds for altering the decision conveyed on 5 September. Bearing in mind that the penalty set out in their letter of 5 September was already a compromise penalty, the Commissioners consider that it is properly payable and no further compromise is possible. I am advised that if payment is not received by 13 February 2014, the Revenue Commissioners will proceed to institute prosecution proceedings. In those circumstances, it will be for the Courts to determine the matter.
196. Deputy Pearse Doherty asked the Minister for Finance if he will provide in tabular form a list of all professional fees, including but not limited to legal, consultancy, IT-related, advisory, capital, advertising and accountancy; the company name and the amount invoiced between 1 May 2011 and 31 December 2013. [3798/14]
View answerThe table below sets out the payments made by my Department in respect of professional fees during the period 1 May 2011 to 31 December 2013:
|
Type of Professional Service |
Company/Service Provider Name |
Amount (€) |
|
Consultancy |
Niamh Hyland |
€24,657.00 |
|
Consultancy |
David Barniville |
€36,402.00 |
|
Consultancy |
Charles River Associates |
€60,500.00 |
|
Consultancy |
ARAM International Partners |
€100,000.00 |
|
Consultancy |
Mazars |
€113,339.00 |
|
Consultancy |
Mercer (Irl) Ltd |
€146,370.00 |
|
Consultancy |
Deloitte & Touche |
€61,553.00 |
|
Consultancy |
Thomas J. Foley |
€71,217.00 |
|
Consultancy |
BDO |
€64,575.00 |
|
Consultancy |
Matheson |
€1,007,527.00 |
|
Consultancy |
Red C |
€180,011.00 |
|
Consultancy |
National Asset Management Agency (NAMA) |
€381,494.00 |
|
Consultancy |
Dr.Anil Shivdasani |
€67,360.00 |
|
Consultancy |
Economic & Social Research Institute (ESRI) |
€39,986.00 |
|
Consultancy |
PCMA Economic Consulting |
€49,043.00 |
|
Consultancy |
Crowe Howarth |
€36,851.00 |
|
Consultancy |
Indecon |
€28,290.00 |
|
Consultancy |
Stratathree |
€46,726.00 |
|
Consultancy |
Brendan Ryan BL |
€900.00 |
|
Consultancy |
Grant Thornton |
€310,807.80 |
|
Information Technology |
Core |
€1,131.35 |
|
Information Technology |
Fusio |
€4,083.75 |
|
Legal |
Arthur Cox & Company |
€5,375,012.00 |
|
Advertising |
Brindley |
€415,480.64 |
|
Advice |
Dr James Higgins |
€8,078.28 |
|
Advice |
Mr Donal McNally |
€15,043.67 |
|
Secondment |
Railway Procurement Agency |
€268,424.13 |
|
Secondment |
Price Waterhouse Cooper |
€427,425.00 |
|
Secretarial Service |
A&L Goodbody Secretarial |
€5,782.00 |
|
Art and Design |
Creative A.D. |
€17,487.50 |
198. Deputy Róisín Shortall asked the Minister for Finance the reason behind the Revenue Commissioners' decision to treat cohabiting couples as single persons; if he will address the discrepancy which arises when persons are denied social protection supports due to their cohabiting income, but are also denied the favourable condition awarded by the Revenue Commissioners to married couples and couples in civil partnerships, such as shared tax credits; and if he will make a statement on the matter. [3825/14]
View answerThe position is that where a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals for the purposes of income tax. Each partner is a separate entity for tax purposes and, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.
The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980), which held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income.
However, a cohabiting couple where both partners are working get, in total, the same tax credits as a married couple or couple in a civil partnership (i.e. €3,300). In addition, the same amount of income is subject to tax at the 20% rate (i.e. €32,800 each). This equates to the €65,600 threshold in the case of a married couple or couple in a civil partnership.
If both cohabitants earn in excess of the standard rate band (i.e. €32,800), then they both pay tax at 41% on any income in excess of €32,800. Married couples or couples in a civil partnership where both individuals work get the same treatment.
The difference between the two groups in relation to income tax is the ability of married couples or civil partners to transfer certain tax credits such as the personal/married credits and part of the tax bands, i.e. the tax band of €65,600 available to married couples or couples in a civil partnership with two incomes in 2013 is transferable between spouses up to a maximum of €41,800. This is of benefit where one of the individuals earns less than the 20% tax threshold of €32,800 or where one of the individuals has no income.
The treatment of cohabiting couples for the purposes of social welfare is primarily a matter for the Minister for Social Protection. However, it is also based on the principle that married couples should not be treated less favourably than cohabiting couples. This was given a constitutional underpinning following the Supreme Court decision in Hyland v Minister for Social Welfare (1989) which ruled that it was unconstitutional for the total income a married couple received in social welfare benefits to be less than the couple would have received if they were unmarried and cohabiting.
199. Deputy Róisín Shortall asked the Minister for Finance the reason the increase between bands one and two of the local property tax is €135, despite the fact the increase between all other bands is €90; and if he will make a statement on the matter. [3826/14]
View answerThe Inter-Departmental Group on the design of a local property tax, the Thornhill Group as it was referred to, recommended the creation of a sufficient number of tax bands to allow property owners to place their properties in an appropriate valuation band with reasonable confidence. The Group considered the owners should be able to do so without potentially being exposed to disproportionate risks if they incorrectly positioned their properties by one or even two bands.
The Thornhill Group considered that grouping all except the most expensive properties into valuation bands (with the rate applying at the mid-point of the bands), could ease the valuation challenges. In devising the bands the Group considered that a balance should be struck between the width of the bands and avoiding substantial liability differences between adjacent bands. The wider the band, the easier it would be to carry out a self-assessment; but very wide bands would run the risk of creating inequities between taxpayers as well as compliance challenges.
Taking account of all aspects, the Group recommended a market value based system of self-assessment involving bands of €50,000 in width, for properties valued between €100,001 and €1000,000. The Group specifically recommended that the tax liabilities on properties valued at less than €100,001 would be a basic charge determined by applying the tax rate to the midpoint value of €50,000. For properties valued at more than €1000,000, tax liabilities would be determined on the self-assessed value using the percentage rates applicable to properties with values in excess of that amount.
The Government accepted the recommendations of the Thornhill Group in this regard and I am satisfied that the current system of valuation bands strikes the appropriate balance between ease of assessment and a smooth progression of liabilities between the valuation bands.
200. Deputy Michael Creed asked the Minister for Finance the way an entrepreneur can avail of a new capital gains tax incentive, having disposed of an asset to put towards financing of a new business; and if he will make a statement on the matter. [3836/14]
View answerI announced in Budget 2014 a capital gains tax relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets. The necessary legislation governing this relief is included in Section 45 of Finance (No 2) Act of 2013. Commencement of the relief is subject to EU state-aid approval.
Subject to EU approval, the relief will apply from 1 January 2014 to individual entrepreneurs:
- Who have made disposals of assets since 1 January 2010 on which they have paid capital gains tax;
- Who invest at least €10,000, in the period from 1 January 2014 to 31 December 2018, in acquiring chargeable business assets that will be used in a new business and
- Who subsequently (after a minimum period of 3 years) dispose of those chargeable business assets at a gain giving rise to a capital gains tax liability.
The relief will be given on the tax due on any chargeable gain arising on the subsequent disposal of the chargeable assets after a minimum period of 3 years and will amount to the lower of:
- the full amount of capital gains tax paid on the initial disposal made since 1 January 2010 or
- 50% of the CGT payable on the disposal of the new chargeable business assets.
If an entrepreneur reinvests the proceeds of that subsequent disposal in a further new business, the relief can also apply on a subsequent disposal of the chargeable business assets of that further new business. Where less than the full proceeds of a disposal on which capital gains tax has been paid are reinvested, only that proportion of the capital gains tax relative to the amount reinvested will qualify for relief. The relief will be given in the form of a tax credit equal to the lower of the capital gains tax paid on the disposal of assets made on or after 1 January 2010 or 50% of the capital gains tax on any gain from the future disposal of the chargeable business assets. Subject to the legislation governing the entrepreneur relief coming into operation, I am informed by the Revenue Commissioners that, where an individual makes a disposal of a chargeable business asset that qualifies for the relief, details of the disposal and chargeable gain made should be included on the individual's tax return for the year in which they occur. The tax return will also include a facility to claim the appropriate entrepreneur relief. The following additional definitions and notes are relevant to the relief:
"Chargeable business assets" for the purposes of this relief mean: assets used wholly for the purposes of a new business carried on by an individual, or new ordinary shares issued on or after 1 January 2014 in a qualifying company over which the shareholder has control and in which the shareholder is a full-time working director.
Chargeable business assets exclude assets that are held as passive investments.
- "Full-time working director" is defined as meaning a director who is required to devote substantially the whole of his or her time to the service of the company in a managerial or technical capacity.
A "qualifying company" is defined as meaning a company which is a micro, small or medium-sized enterprise as defined in Article 2 of the Annex to European Commission Recommendation of 6 May 2003 essentially one which employs fewer than 250 persons and which has an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million.
"New business" must be a business carrying on relevant trading activities which comprise
- activities which come within the scope of the Employment and Investment Incentive Scheme that is, activities carried on in the course of a trade the profits or gains of which are charged to tax under Case I of Schedule D (subject to the exclusions described in the next paragraph) or
- farming of farm land in the State wholly or mainly occupied for the purposes of husbandry, other than market gardening and that were not previously carried on by the entrepreneur or by anyone connected with the entrepreneur.
The trading activities that are excluded from the relief are:
- Dealing in commodities or futures or in shares, securities or other financial assets,
- Financing activities,
- Dealing in or developing land,
- Occupation of commercially managed woodlands in the State,
- Operation or managing hotels, guest houses, self catering accommodation or comparable establishments or managing property used as an hotel, guest house, self catering accommodation or comparable establishment, to the extent that they are not "tourist traffic undertakings",
- Operating or managing nursing homes or residential care homes or managing property used as a nursing home or residential care home,
- Operations carried on in the coal industry or in steel and shipbuilding sectors,
- Film production,
- The provision of professional and similar-type services or facilities by closely controlled companies whose income from such activities, if they had no other sources of income, would be subject to surcharge if not distributed,
- Occasional or once-off activities which, although technically trades for the purposes of assessment of any profits arising from them, would not be regarded as trades in the common sense of the term.
Tourist traffic undertakings means the operation of tourist accommodation facilities for which Fáilte Ireland (the National Tourism Development Authority ) maintains a register, the operation of such other classes of facilities as may be approved of for the purpose of the Employment and Investment Incentive Scheme by the Minister for Finance, in consultation with the Minister for Tourism, Culture and Sport, on the recommendation of Fáilte Ireland, or the promotion outside the State of any of the foregoing facilities.
201. Deputy Brendan Griffin asked the Minister for Finance the reason a person (details supplied) in County Kerry did not receive the maturity options forms for saving certificates; and if he will make a statement on the matter. [3863/14]
View answerThe National Treasury Management Agency (NTMA) have advised that An Post have carried out an enquiry into the issue raised. An Post have informed the NTMA that the relevant maturity option forms were despatched to the registered address of the person but they were returned as undelivered because the postman could not effect a delivery to the specified address as there is no letter box on the premises to enable a delivery to be made. An Post will attempt to contact the person to seek to make alternative arrangements for the delivery of the Maturity Option forms.
