Written Answers Nos. 81-89
81. Deputy Michael McGrath asked the Minister for Finance his views on whether the capital gains tax exemption for property purchases is having a detrimental impact on the ability of owner occupiers to purchase family homes; and if he will make a statement on the matter. [8833/14]
View answerI assume that the Deputy is referring to the capital gains tax relief for land or buildings acquired in the period commencing on 7 December 2011 and ending on 31 December 2014 provided for in Section 604A Taxes Consolidation Act 1997, provided that the property is held for a period of at least seven years subsequent to purchase.
The Deputy is no doubt aware that there is no CGT charge in respect of the sale of a family home. The main impact of the introduction of the exemption would have been in the commercial property area, including buy-to-lets. Concerns have been expressed about the residential property market in Dublin. However, these concerns relate largely to issues of supply of certain types of property in the city. I am not aware of any indications that the CGT exemption measure is an issue in this regard. Furthermore, such supply side pressures do not appear to be a feature of the property market nationally.
I have no intentions of stoking another property bubble and this is reflected in the fact that the CGT exemption measure is time-bound and of relatively short duration. I will, however, continue to closely monitor developments in the property market, with a view to determining appropriate measures that need to be taken or amended.
82. Deputy Michael McGrath asked the Minister for Finance the amount of the National Pensions Reserve Fund discretionary portfolio that will be invested in job-supporting initiatives in 2014; and if he will make a statement on the matter. [8834/14]
View answerAs the Deputy is no doubt aware, the Government has decided to establish the Ireland Strategic Investment Fund (ISIF) which will absorb the resources of the National Pensions Reserve Fund (NPRF). Officials of my Department are currently preparing the necessary legislation which I hope to publish in the first half of 2014.
The ISIF will have a statutory mandate to invest on a commercial basis to support economic activity and employment in Ireland. The discretionary fund of the NPRF, worth some €6.8 billion at end-December 2013, will become available to invest in Ireland as suitable investment opportunities arise and are developed.
The NPRF Discretionary Portfolio has committed close to the twenty per cent limit for Irish exposure determined by the NPRF Commission as being an appropriate maximum level of investment in Ireland under the Fund's current statutory investment mandate. As at 31 December 2013 the total amount committed by the NPRF to investment in Ireland was €1,257 million.
83. Deputy Michael McGrath asked the Minister for Finance if Ireland has made a formal case to the ESM for the manner in which retrospective recapitalisation of the banks could take place; and if he will make a statement on the matter. [8835/14]
View answerAs I have outlined in my replies to a number of previous Parliamentary Questions, the Euro-area Heads of State or Government (HoSG) agreed in June 2012 that "it is imperative to break the vicious circle between banks and sovereigns", and that when a Single Supervisory Mechanism, involving the ECB, is in place and operational, the European Stability Mechanism could recapitalize banks directly.
The Eurogroup meeting of euro area Finance Ministers on 20th June 2013 agreed on the main features of the European Stability Mechanism's Direct Recapitalisation Instrument. There is a specific provision included in those main features, which states that "The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement." Therefore, the agreement, that we were active in negotiating, keeps open the possibility to apply to the European Stability Mechanism for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it.
As the single supervisory mechanism is not expected to be in place and operational until later this year, the ESM's Direct Recapitalisation Instrument cannot take effect until then. It would not therefore be possible to make a formal application to the ESM for retrospective recapitalisation in advance of the Instrument being in place.
However, both I and my Government colleagues will ensure that Ireland's case for retrospective direct recapitalisation will continue to be made at all levels as appropriate. I remain confident that the commitment made by the Euro-area Heads of State or Government in June 2012 to break the vicious circle between banks and sovereigns will be respected.
84. Deputy Michael McGrath asked the Minister for Finance when remote betting will be subject to betting duty; and if he will make a statement on the matter. [8837/14]
View answerAs the Deputy will be aware, the Betting (Amendment) Bill 2013 which provides for a licensing and regulatory regime for the remote betting sector has already been taken through Second Stage in the Dáil. Committee and remaining stages are subject to scheduling arrangements with the Whips office.
Taxation of the remote betting sector was provided for in Finance Act 2011 and remains subject to commencement order. The enactment of the Betting (Amendment) Bill 2013 will allow for the introduction of the Order and the consequent taxation of remote operators.
85. Deputy Michael McGrath asked the Minister for Finance if will consider relaxing the pension fund levy for pension schemes in severe difficulties and seeking to complete a restructuring; and if he will make a statement on the matter. [8838/14]
View answerI announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I have however, introduced an additional levy on pension funds at 0.15% to, among other things, continue to help fund the Jobs Initiative. The additional levy, within the existing legal framework, will apply to pension fund assets in 2014 and 2015.
The chargeable persons for the pension fund levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans.
There are two exceptions to the requirement to pay the levy provided for in the governing legislation (section 125B of the Stamp Duties Consolidation Act 1999).
The first exception provides that the levy will not apply to the assets of occupational pension schemes in respect of employees whose employment is, or was, wholly exercised outside the State. In other words, the levy does not apply to the extent that a pension scheme is intended to provide retirement benefits outside the State.
The second exception provides that the levy will not apply where the trustees of a scheme have passed a resolution to wind-up the scheme and where the business in respect of which the scheme was established is insolvent in accordance with the Protection of Employees (Employers' Insolvency) Act 1984.
The fact that there are very limited situations where the levy does not have to be paid explains, in part at least, why it was possible to introduce it at a relatively low rate of 0.6% in the first place and to keep the rate of the additional levy as low as 0.15%. Making exceptions in the circumstances outlined in the question, will inevitably give rise to demands for exceptions to be granted in other situations that would be viewed by those seeking them as being equally deserving. The inevitable result of this course of action would be a narrowing of the levy base which would result in a greater imposition on the non-exempt schemes and I am not prepared to go down that road.
86. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the implementation of the Single European Payments Area; and if he will make a statement on the matter. [8839/14]
View answerThe implementation of the Single Euro Payments Area (SEPA) in Ireland has been under way for some time now, overseen by the Central Bank of Ireland. In recent months a significant proportion of payments generated in Ireland have moved to the two SEPA schemes, SEPA Credit Transfer and SEPA Direct Debit. It is anticipated that all payments will be processed in SEPA by 31 March 2014, well in advance of the transitional deadline of 1 August 2014, allowed by the European Commission.
As we transition between our domestic payments system and SEPA, delays on when payments are shown as having been received in bank accounts have been experienced by a small percentage of account holders. These relate to an intra-day delay in payment processing and do not have value implications for customers. The Central Bank has informed me that it is working closely with the Irish Payment Services Organisation and the individual banks to have any known issues rectified in the shortest possible timeframe.
The Deputy will also be aware of the impact of SEPA on the end January Exchequer returns. This problem related to the longer notice period required for SEPA Direct Debits. The end January Exchequer figures were down in year-on-year terms. However, this was a technical timing issue and will not alter the tax forecast for the year. I understand that these notice periods are expected to reduce as SEPA is reviewed over the coming years.
87. Deputy Michael McGrath asked the Minister for Finance if he will ensure that those who have received notification of a liability for local property tax in 2014 and have chosen to pay by single debit authority but who are in fact entitled to a three year exemption, will not have the LPT deducted from their accounts on 21 March; the number of persons he estimates will fall in to this category; and if he will make a statement on the matter. [8841/14]
View answerAny property owner, who has claimed an exemption from Local Property Tax (LPT) in filing their 2013 LPT1 Return, provided they continue to satisfy the conditions, will be exempt until the end of 2016.
However, if the Deputy is referring to property owners who may now qualify for an exemption under section 8 of the Finance (Local Property Tax) Act 2012 (as amended), in my reply to Question 166 on 4 February I informed the House how Revenue would deal with these cases. The Revenue Commissioners have advised me that the section 8 exemption applies to a clearly defined group of property owners, who are being identified using Stamp Duty records. There is a significant amount of work involved in identifying individuals who bought in 2013 and who may be entitled to claim the exemption. The Deputy will be aware that the section 8 exemption only applies to properties that are used as the person's sole or main residence.
The Commissioners further advise that they have prioritised the work involved in identifying the potential property owners affected and they confirm that further progress has been made. When this work is completed Revenue will write to these individuals and will provide advice on what action should be taken where the individual confirms that she or he qualifies for the exemption and how they should go about claiming it.
I am further informed that any property owner who falls into this category can now claim the exemption under section 8 by accessing their LPT record using their Property ID, PIN and PPSN without waiting for the letter from Revenue. Step-by-step instructions on how to claim the exemption online are available on the Commissioner's website at the following link http://www.revenue.ie/en/tax/lpt/section8-exemption.html. Where a claim for exemption under Section 8 has been received by Revenue and found to be in order, Revenue has confirmed that if the property owner had completed a Single Debit Authority (SDA) dated 21 March 2014 that the SDA will not be activated by Revenue where Revenue is notified no later than 10 March.
For those property owners who do not manage to claim the exemption before 10 March and had completed the SDA, when they subsequently claim the exemption the overpaid LPT will be refunded.Revenue has advised that the number of property owners who qualify for the exemption under section 8 and who also completed the SDA will not be available until the claims for exemption are finalised.
88. Deputy Michael McGrath asked the Minister for Finance the number of requests for increases in fees and charges submitted by banks to his Department in each year since 2011; the number that have been approved; and if he will make a statement on the matter. [8842/14]
View answerSection 149 of the Consumer Credit Act 1995 (as amended) came into effect in May 1996 and requires that credit institutions and bureaux de change notify the Central Bank, not my Department, if they wish to:
- introduce any new customer 'charge' for providing a service or
- increase any existing customer 'charge' for providing a service.
I do not have the data in the exact format requested by the Deputy. However the recent report on the Regulation of Bank Fees and Charges by my Department provided details of Section 149 Notifications to the Central Bank in 2012 and 2013* as follows:
|
Notifications |
2012 |
2013 |
|
Full Approval |
9 |
11 |
|
Partial Approval |
7 |
4 |
|
Rejections |
0 |
1 |
|
Exemptions |
4 |
2 |
|
Total |
20 |
18 |
* Data correct as of 28 November 2013.
Note: Partial Approval figures may include some rejected charges. This report is available on My Department's website at www.finance.gov.ie.
The Central Bank confirmed to the Joint Committee on Finance and Public Expenditure and Reform that the figures for 2011 were as follows:
|
Notifications |
2011 |
|
Full Approval |
15 |
|
Partial Approval/rejections |
10 |
|
Exemptions |
11 |
|
Total |
36 |
The following table, also provided by the Central Bank, shows the notifications processed by the Central Bank under Section 149 of the Act between 1 October 2013 and 31 January 2014.
|
Section 149 Notifications |
|
|
Notifications |
Number |
|
Full Approval |
7 |
|
Partial Approval |
1 |
|
Rejections |
0 |
|
Exemptions |
1 |
|
Total |
9 |
Note: ('partial approval' figures may include some rejected charges).
This latest information was included in a reply to a Parliamentary Question on 4 February. I trust that this provides sufficient information to the Deputy on the outcome of applications for increases in fees and charges.
89. Deputy Michael McGrath asked the Minister for Finance if AIB has sought his views on a full disposal of any part of its mortgage loan book; his views on such a course of action; and if he will make a statement on the matter. [8843/14]
View answerIn the Relationship Framework with AIB, it is recognised that the bank remains a separate economic unit with independent powers of decision and that its Board and management team retain responsibility and authority for determining AIB's strategy and commercial policies and conducting its day-to-day operations.
However under Clause 11 of this framework, AIB would be obliged to consult with me if they were proposing a disposal of a loan/loans for an amount in excess of €100 million.
Should I be consulted on the sale of any part of the mortgage loan book in the future I would carefully consider the matter based on the facts including the impact on profit, capital and funding in AIB.
