Written Answers Nos. 53-71
53. Deputy Thomas P. Broughan asked the Minister for Finance if it is his policy to allow for property tax paid by a landlord to be offset as an expense against their tax liability for rental income earned on their property. [18686/14]
View answerThe Thornhill Group, the inter-departmental group chaired by Dr Don Thornhill established to consider the structures and modalities of a property tax, recommended that Local Property Tax (LPT) paid by the owner in respect of a rented property should be deductible for income tax or corporation tax purposes, in a similar manner to commercial rates. The Government has agreed in principle to accept this recommendation but has not considered the manner or the timing in which this will happen.
54. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on a recent briefing given to the Central Bank of Ireland officials by an economist (details supplied); and the actions that may be taken by the Central Bank of Ireland on foot of this briefing. [18687/14]
View answerI have been informed by the Central Bank that a meeting has taken place between Professor Morgan Kelly and representatives of the Central Bank, but I am not privy to the details of any such meetings conducted by the Central Bank.
As the Deputy is aware, the remarks by the UCD academic Morgan Kelly relate to the forthcoming stress testing by the ECB and in this context the Governor of the Central Bank indicated recently that the purpose of the forthcoming ECB stress tests on 128 European banks, which includes Irish banks, was to remove market and government doubts about the ability of banks to absorb losses with their own shareholders funds. It is important to highlight that the ECB Comprehensive Assessment will not get into loan restructuring. The objective of the review is focused solely on determining whether the banks have enough provisions against their loans and capital. Irish banks have just undergone such an exercise, their second in less than three years, which led to a substantial increase in their loan loss provisions at year end. As I have stated previously, I do not anticipate any capital issues for the Irish banks arising from the Comprehensive Assessment.
55. Deputy Dan Neville asked the Minister for Finance if notice of assessment will be provided from the Revenue Commissioners showing non-liability of tax for 2012 in respect of a person (details supplied) in County Limerick. [18747/14]
View answerI am advised by the Revenue Commissioners that this taxpayer contacted Limerick Revenue District on Friday 25th April. A Tax Return for 2012 was issued to the taxpayer on that day. On receipt of the completed return, a notice of assessment will issue immediately, in accordance with the information contained in the form.
56. Deputy James Bannon asked the Minister for Finance the tax arrangements that apply in respect of a 32 year old vintage tractor (details supplied) in County Longford; and if he will make a statement on the matter. [18749/14]
View answerI am informed by the Revenue Commissioners that the Finance Act 1992, Part II, Chapter IV provides that, for Vehicle Registration Tax purposes, tractors are classified as Category C vehicles and liable to a VRT charge of €200. All vehicles, unless they have a specific arrangement with the Revenue Commissioners, must be registered not later then 30 days following their arrival in the State. Section 132(3A) of the same act provides for a late charge where a vehicle is not so registered.
In late 2013, following the introduction of measures contained in the Non-Use of Motor Vehicles Act 2013 relating to vehicles off the road, there was a large number of tractors presented to motor tax offices. Many of these were very old vehicles, some of which had been registered in the State and others not. The situation was complicated by the fact that a lot of those vehicles that were declared as registered had no supporting paperwork. The Revenue Commissioners recognised that this was an exceptional situation and, between 1 October 2013 and 31 March 2014, put a system in place to ensure that the primary aim of registering these vehicles was achieved.
In the case in question, the Revenue Commissioners advise that contact should be made with the VRT Branch in Dublin Castle (01-8589147) to resolve the issue.
57. Deputy Joe Higgins asked the Minister for Finance the amount income tax relief on pensions cost the Exchequer in 2013; and the percentage of that total of relief benefit to each decile of earners from the highest to the lowest. [18762/14]
View answerI am informed by the Revenue Commissioners that the total tax expenditure in respect of pension contributions for 2011, the latest year for which data are available, is estimated to be in the region of €1,500 million.
These costs include those associated with employee and employer contributions to approved superannuation schemes, exemption of employers contributions from employee benefit in kind taxation, retirement annuity contracts and personal retirement saving accounts. It does not include the costs associated with the exemption of income and gains of approved superannuation funds or tax relief on "tax free" lump sums as the information is not available for 2011. However, the cost for these two reliefs for 2010 is estimated to be in the region of €970 million.
A breakdown of these costs by reference to deciles of incomes could not be provided without undertaking an extensive and costly development of Revenue systems and there would likely be significant additional compliance and administrative costs on employers and others in having to provide much more detailed data than is currently provided. Data in respect of the year 2012 are currently being processed and will be available in due course, while data in respect of 2013 are still being collected or are not required to be returned until later this year.
58. Deputy Joe Higgins asked the Minister for Finance the number of National Asset Management Agency-owned houses and apartments that exist in the four Dublin local authority areas. [18763/14]
View answerThe Deputy will be aware that NAMA's role in relation to property is, like a bank, that of a secured lender and that it does not, generally speaking, own residential or other property assets securing its loans. Rather, such properties are owned and managed by NAMA debtors or, in the case of enforcement, are managed by the appointed insolvency practitioner. I am advised that NAMA has an exposure as a secured lender to approximately 14,000 completed residential properties in Ireland through its debtors and receivers and that about 70% of these properties are located in Dublin.
The Deputy may also be aware that NAMA made over 4,600 residential units controlled by its debtors and receivers available for social housing. Demand has been confirmed by local authorities for just over 1,800 of these properties and NAMA is facilitating the purchase or leasing of these houses and apartments by local authorities and approved housing bodies.
I am advised by NAMA that 1,321 houses and apartments have been made available to local authorities in Dublin. Demand has been confirmed by the Dublin local authorities for 534 of these properties, of which, to date, 324 have been delivered for social housing. The breakdown of these figures by Dublin local authority is set out below. The properties which the local authorities did not consider suitable for meeting social housing demand have subsequently been let in the private rental market or sold by their owners or receivers.
|
Offered by NAMA |
Demand Confirmed by NAMA |
Delivered to Date |
|
|
Dublin City Council |
753 |
322 |
163 |
|
Dun Laoghaire Rathdown |
305 |
114 |
77 |
|
Fingal County Council |
203 |
56 |
44 |
|
South Dublin County Council |
60 |
42 |
40 |
|
1,321 |
534 |
324 |
59. Deputy Michael McGrath asked the Minister for Finance the options open to persons for payment of the local property tax which do not involve any transaction fees or charges; and if a person can pay the tax in cash at the local revenue office. [18800/14]
View answerI am advised by Revenue that no transaction fees or charges are incurred where liable persons opt to pay their Local Property Tax (LPT) or arrears of Household Charge (HHC) through Deduction at Source from employment, occupational pension or certain payments from the Departments of Social Protection and Agriculture, Food and the Marine.
In regard to the other payment options that are available for the payment of LPT / HHC including cheque, debit card, credit card, direct debit and Single Debit Authority (SDA), I am advised that, while Revenue does not apply any transaction fees or charges, it has no discretion in relation to the charges or fees that the various financial institutions decide to apply to a transaction.
Neither does Revenue have any discretion in regard to the charges that the three approved Service Providers apply to LPT/HHC transactions. For the Deputy's information, An Post currently charges €1 per transaction, Omnivend charges 4% per transaction, and Payzone charges 75 cents per transaction up to €50, €1 per transaction for payments between €50.01 and €100 and €2 per transaction for payments over €100.
In regard to the Deputy's query as to whether local Revenue offices will accept cash payments of LPT/HHC, I am advised that Revenue offices do not accept cash payments in respect of any tax, including LPT and HHC, on foot of security concerns, and there are no plans to change this policy.
Finally, I am satisfied that the range of payment options put in place by Revenue to assist people in meeting their LPT/HHC obligations provide a great amount of flexibility to suit individual circumstances and I commend the Commissioners in this regard.
60. Deputy Michelle Mulherin asked the Minister for Finance if he will set out the strategies, policies and the proposed use of resources the National Asset Management Agency will embark upon in the next 12 months; and if he will make a statement on the matter. [18812/14]
View answerThe Deputy may be aware that, under Section 53 of the NAMA Act 2009, NAMA is required to submit to me, before end-September in each year, an annual statement setting out its proposed objectives, activities, strategies, policies and proposed use of resources for the subsequent financial year. NAMA's Annual Statement for 2014, which was submitted to me in September 2013, is available on its website, www.nama.ie/publications/. I am advised that NAMA's Annual Statement for 2015 will be submitted to me in September 2014 and I expect that it will laid before the Dáil and published shortly thereafter.
The Deputy may also be aware that I am required, under Section 227 of the Act, to conduct an assessment, every five years, of the extent to which NAMA is making progress towards achieving its overall objectives. The first such Section 227 review is currently underway. In the context of my Departments review, I have asked NAMA to evaluate their disposal timing and strategy in the context of current market demand and explore the advantages and disadvantages of accelerating its disposal strategy.
I am advised that the NAMA Board is currently reviewing its asset disposal projections and the timeframe over which it can expect to repay its liabilities which currently are in excess of €21 bn and I expect to have discussions with the NAMA Chairman and Chief Executive in the near future as regards the outcome of the Board's deliberations.
61. Deputy Michelle Mulherin asked the Minister for Finance if he will confirm that all loans taken over by the National Asset Management Agency have been audited by the European Commission in relation to acquisition values; and if he will make a statement on the matter. [18813/14]
View answerAs the Deputy will be aware, as part of the EU State aid approval process for the NAMA Scheme, which was approved by the Commission on 26 February 2010, the Irish authorities committed to notify each tranche of transferred bank assets to the Commission under EU State aid rules. Tranche 1 (N331/2010) and Tranche 2 (N529/2010) of the NAMA loans were approved by the European Commission in 2010.
In September 2010, it was agreed to expedite the final tranches. I am advised by my officials that a report was submitted on Tranches 3-9 to the European Commission on the 4 April 2014 and we are awaiting their decision on the matter. I do not envisage any issues with the approval process.
62. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance if he has decided on a date to bring forward budget 2015; and if he will make a statement on the matter. [18864/14]
View answerAs the Deputy may be aware, under an EU regulation adopted last year (Regulation (EU) No 473/2013), all Member States are required to publish their draft budget for central government and the main parameters of all other General Government sub-sectors no later than 15 October each year.
While the date of Budget 2015 is yet to be decided, in light of the above requirement, it must be on or before the 15th of October. The actual date will be decided by Government and announced in due course.
63. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance further to Parliamentary Question No. 211 of 21 January 2014, if the number of homeowners who have availed of the home renovation incentive to date is available; and if he will make a statement on the matter. [18865/14]
View answerI am advised by the Revenue Commissioners that the first claims for tax relief under the Home Renovations Incentive (HRI) will not be made until January 2015 and it is not possible to say at this point how many residential property owners will avail of the relief.
I introduced the Home Renovations Incentive in Finance Act (No 2) 2013. It provides for tax relief for property owners by way of an income tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works.
These works must be carried out on the property owner's main residence by Contractors who qualify to participate in the HRI scheme.
The property owner can claim the HRI tax credit in the year after the work is carried out and paid for, starting from January 2015, using Revenue's Home Renovation Incentive online system. This includes his or her claim for work carried out and paid for between 25 October 2013 and 31 December 2013.
A simple, easy to use, online Home Renovation Incentive system was introduced on 10th April 2014. This allows contractors to record details of works being carried out and payments received by them. It also allows property owners to look up the details that the contractor has entered in relation to their works.
While the online system was only introduced on 10th April, I am advised that there has already been a significant amount of activity in the online system. Contractors have until 8th May to input works and payments for the period 25th October 2013 to 9th April 2014. These works and payments are now being input, as well as new works and payments. The following are details of activity in the online system as at start of business on Monday 28th April:
|
- |
Number and Value |
|
Number of properties that works have been entered for |
933 |
|
Value of works entered |
€15.5m |
|
Number of properties that payments have been entered for |
691 |
|
Value of payments entered |
€9.2m |
64. Deputy Jerry Buttimer asked the Minister for Finance if he will consider increasing the proportion of mortgage interest on rented residential property that is tax deductible; if he considers that such a measure would help counteract the increase in rents on residential properties; and if he will make a statement on the matter. [18874/14]
View answerThis question relates to the interest restriction applying to residential lettings, whereby the deductibility of interest in computing taxable rental income from residential property (insofar as it would otherwise be allowable) is limited to 75% of such interest.
Rental income for tax purposes from such property is the gross rental income less allowable expenses incurred in earning that rent, as specified in section 97(2) of the Taxes Consolidation Act 1997. The main deductible expenses are:
- any rent payable by the landlord in the case of a sub-lease;
- the cost to the landlord of any goods provided or services rendered to a tenant;
- the cost of maintenance, repairs, insurance and management of the property;
- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and
- payment of local authority rates.
In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.
Where the aggregate of deductible expenses in any year exceed the gross rental income, the amount of the deficit is set against rental profits of the same year from other property. Where there are no other rental profits in the same year, the deficit is carried forward as a rental loss for offset against rental profits in future years.
The 75% restriction on interest on borrowed money used to purchase, improve or repair residential property was introduced in the April 2009 supplementary budget as part of an urgent revenue-raising package aimed at stabilising the public finances and I have no plans at this stage to amend it.
65. Deputy Pearse Doherty asked the Minister for Finance his views on transport providers providing the Revenue Commissioners with the invoices for purchases of petrol-diesel on a quarterly basis and as a 2,000 litre minimum is achieved for the purposes of the excise rebate. [18878/14]
View answerI introduced this scheme in the Finance Act 2013 in order to provide for a repayment to qualifying road haulage and bus operators of a part of the mineral oil tax paid on their purchases of auto-diesel for use in the course of business. The scheme does not apply to sales of petrol. In order to address the risk of widespread abuse of the scheme, provision was made for certain restrictions on the means by which the auto-diesel concerned may be purchased. Purchases in bulk must be made from a licensed mineral oil trader, and delivered, in a quantity exceeding 2,000 litres, to a premises or place that is under the control of that qualifying road transport operator.
Bulk purchases from licensed mineral oil traders can be verified by reference to the monthly electronic returns that the oil traders are required to make to Revenue. These returns form part of the supply chain controls introduced by Revenue to tackle the problem of illicit fuel, prior to the introduction of the diesel rebate scheme. The return provides an electronic record of the purchases, stock movements and sales of mineral oil each month by licenced mineral oil traders, by oil product type, including bulk sales to customers exceeding 2000 litres. This information can be used to verify electronically claims for bulk purchases under the diesel rebate scheme. A reduction in the minimum bulk purchase requirement for the diesel rebate scheme would require a corresponding reduction in the minimum threshold for purchases to be reported by mineral oil traders in their monthly returns, greatly increasing the number of transactions to be reported in these returns and the related administrative burden on the mineral oil traders.
Purchases by means of a fuel card, approved by Revenue for the purpose of the scheme, also qualify for repayment and there is no minimum requirement on purchases made in this way. A fuel card will be approved where Revenue is satisfied that the fuel card provider will supply it with the information required about purchases of auto-diesel by means of that card. Fuel cards are widely available and are usable across the road network and there are a number of fuel card providers who can supply suitable fuel cards to road transport operators and fuel retailers.
The current purchasing arrangements under the scheme are necessary to enable Revenue to manage repayments to qualifying transport operators while controlling the risk of fraud. I am satisfied that the purchasing arrangements achieve the right balance between making the scheme available to compliant transport operators and allowing Revenue to manage effectively the risk of fraud and I do not plan to change these arrangements.
66. Deputy Mary Mitchell O'Connor asked the Minister for Finance the reason autism assistance dogs do not qualify for tax relief in the way that blindness assistance dogs do; and if he will make a statement on the matter. [18897/14]
View answerThe position is that autism assistance dogs are considered to be companions to autistic children and do not work in the same manner as a guide dog for a blind individual.
A blind person who maintains a trained guide dog is allowed a sum of €825 per year in computing the gross eligible health expenses. This is the equivalent of a tax credit of €165 and is only available in respect of fully trained guide dogs. The qualification criteria for granting this additional relief is that the individual must be entitled to the Blind Person's Tax Credit under section 468 Taxes Consolidation Act 1997 (TCA) and also provide written confirmation from the Irish Guide Dogs Association that he or she is the registered owner of a trained guide dog.
To qualify for the Blind Person's Tax Credit, an individual or the individual's spouse or civil partner must have impaired vision to an extent specified in the legislation and certified by an eye specialist, i.e. a medical practitioner with an additional qualification in Ophthalmic Medicine or Ophthalmic Surgery, or a registered Optometrist. A doctor's certificate is not sufficient.
Relief in respect of health expenses is allowed in accordance with the provisions of section 469 of the Taxes Consolidation Act 1997. In order to qualify for relief an individual must show that he or she has incurred health expenses for the provision of health care. For the purposes of section 469 "health care" is the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability.
Given that there is a requirement for certification by a qualified practitioner in order to obtain the Blind Person's Tax Credit, the use of a fully trained guide dog to alleviate the disability is deemed to constitute a health expense and it is on this basis that this additional relief for health expenses is allowed. Autism assistance dogs are primarily trained to act to improve the behaviour of the child by promoting calmness and acting as a safety aid. These dogs act as a constant companion for the child and in certain circumstances can enhance the child's social skills and interaction with their family and peers.
While the companionship, improved calmness and other such benefits are well testified, a medical basis that would bring such effects under the health legislation does not exist, and to allow relief for health expenses in this context would inevitably lead to calls for similar treatments, therapies or pet companions in other areas of disability to qualify for relief.
67. Deputy Heather Humphreys asked the Minister for Finance the position regarding the taxation of child care income for grandparents who mind their son's or daughter's children; and if he will make a statement on the matter. [18916/14]
View answerAn exemption from tax for certain providers of childcare services was introduced in 2006. This exemption was a positive measure, aimed at smaller providers of childcare services.
Individuals in receipt of income from childcare services are, in general, chargeable persons. However they can claim an exemption from income tax and USC, provided:-
- the gross amount of childcare income does not exceed €15,000 in the year,
- they are minding not more than 3 children, and
- the children are looked after in the home of the childminder.
They must also notify the relevant childcare authorities each year that they are providing childcare services in their home.While the childcare income is exempt from income tax and USC, PRSI is chargeable, however PRSI does not apply where:-
- the provider of the childcare is over 66 years of age; or
- the provider is under 66 and the person's only income source is childcare income which is less than €15,000 per annum.
Therefore, in the case of grandparents providing the childcare, once they are over 66 and meet the conditions of the exemption, they will have no liability to tax, USC or PRSI.
68. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the carry over to budget 2015 in respect of the local property tax, changes to the maximum allowable pension fund for tax relief purposes, carbon tax, capital gains tax, capital acquisitions tax, PRSI and other measures; and if he will make a statement on the matter. [18947/14]
View answerAs the Deputy will be aware, a carryover effect may arise as a result of a difference in the tax revenue generated from a tax measure in the year of implementation and the first year that the full impact of tax measures takes effect. The Local Property Tax (LPT) was introduced in 2013 and the carryover will be seen this year. Therefore, there will be no carryover in 2015. In addition, there is not expected to be a carryover in 2015 in respect of the changes to the maximum allowable pension fund for tax relief purposes (the Standard Fund Threshold -SFT).
However, there will be other carryover measures from previous budgets and they are estimated to be broadly neutral in 2015 with a small negative carryover in the region of €10 million.
The exact impacts of carryover will be reviewed as part of the Budget 2015 process, as there are a lot of moving parts to be considered, such as economic growth take up of various schemes and specific tax relevant factors, which could impact on the expected return from the measures. These will be reflected in the White Paper on Receipts and Expenditure which will be published in advance of Budget 2015.
|
Tax Head |
2015 Carryover €m |
|
Income Tax |
+3 |
|
VAT |
-2 |
|
Excise Duties / (carbon tax) |
-12 |
|
Stamp Duty |
-5 |
|
PRSI |
+6 |
|
Corporation Tax |
Nil |
|
LPT |
Nil |
|
CGT |
Nil |
|
CAT |
Nil |
69. Deputy Sean Fleming asked the Minister for Finance the current situation regarding capital gains tax; if individuals who sell some land and use the proceeds to buy other land, which they are not directly involved in farming themselves, are subject to capital gains tax; if any roll-over relief is allowed in this situation; if the deductions can be made from the sale price to calculate the capital gains tax and if the original sale price and improvement works carried out on these lands may be deducted as a cost in arriving at the gain; and if he will make a statement on the matter. [18967/14]
View answerI am informed by the Revenue Commissioners that land is a chargeable asset for capital gains tax purposes. Accordingly any chargeable gain made on a disposal of land is subject to capital gains tax. Roll-over relief has not been available in respect of any disposals of chargeable assets made on or after 4 December 2002.
A chargeable gain is the difference between the sale price (net of incidental costs incurred wholly and exclusively for the purposes of the sale e.g., solicitors costs, auctioneers costs, advertising costs) and the purchase price (including the incidental costs incurred wholly and exclusively for the purposes of the acquisition e.g. solicitor's fees, auctioneer's fees, stamp duty). If the land was owned prior to 6 April 1974, the market value of the land as at 6 April 1974 is substituted for the purchase price and incidental costs of acquisition. Any costs of a capital nature incurred in enhancing the land are allowable as a deduction in computing a chargeable gain. Where the land was owned at 6 April 1974 only costs of a capital nature incurred since that date in enhancing the land are allowable as a deduction ( as any market value figure at 6 April 1974 would reflect any such costs incurred before that date).
If the land was purchased on or before 31 December 2002, the purchase price and incidental costs of acquisition are adjusted by an indexation factor to take account of the impact of inflation from the year of acquisition (or 6 April 1974, where the asset was acquired prior to that date) to 31 December 2002. In the case of development land, indexation relief is confined to the current use value of the land.
Retirement relief or farm restructuring relief are available to farmers who satisfy the requirements governing these reliefs. However I understand that the individual in respect of whom this question is asked is not a farmer and would not therefore qualify for these particular reliefs.
The first €1,270 of any capital gain made by an individual in any year is not chargeable to capital gains tax. The current rate of capital gains tax on any chargeable gain is 33%.
Detailed information on all aspects of capital gains tax (including allowable deductions, indexation relief factors and the method of calculation of a capital gain), is available in Revenue's Guide to Capital Gains Tax, leaflet CGT1, on the Revenue website, www.revenue.ie.
70. Deputy Pearse Doherty asked the Minister for Finance in respect of the report by PwC into the disposal of the Irish Bank Resolution Corporation mortgage book, a heavily-redacted copy of which was recently provided to the finance committee, if he will outline the methodology used by PwC in determining the value of underlying residential property. [18968/14]
View answerI am advised by the Special Liquidators that the methodology used by PwC in determining the value of the underlying residential property values involved a combination of recent property valuations and an indexation of property values.
71. Deputy Pearse Doherty asked the Minister for Finance in respect of the report by PricewaterhouseCoopers into the disposal of the Irish Bank Resolution Corporation mortgage book to confirm if PricewaterhouseCoopers examined the market value of residential market loans, as suggested by the disposal in 2012 of the GE Money portfolio to Pepper and the 2012 transfer of a €1.3 billion par value portfolio from Allied Irish Banks to its pension fund; and if he will make a statement on the matter. [18969/14]
View answerI have been advised by the Special Liquidators that all assets were valued in line with standard valuation methodologies and the Ministerial Instruction. This included an assessment of current market value to third party investors and also NAMA.
