Wednesday, 17 Sep 2014

Written Answers Nos. 186-213

Tax Data

Questions (186)

John Deasy

Question:

186. Deputy John Deasy asked the Minister for Finance the number of applications that were successful under the CGT entrepreneurial relief scheme; and the cost to the Exchequer. [32992/14]

Written answers

Minister for Finance

Section 45 of Finance (No 2) Act of 2013 provides for 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. Commencement of the legislative provisions is subject to EU state-aid approval. Discussions with the EU Commission about State Aid clearance are ongoing. I hope that these will result in a positive outcome in the near future. Notwithstanding that the legislative provisions have yet to be commenced, the CGT relief will only apply, among other conditions, where new chargeable business assets acquired after 1 January 2014 are disposed of having been held for a minimum period of 3 years after that date.

Budget Measures

Questions (187)

John Deasy

Question:

187. Deputy John Deasy asked the Minister for Finance the current status of the living city initiative announced in the last budget; and the number of times the interdepartmental group dealing with the matter has met. [32993/14]

Written answers

Minister for Finance

My officials met formally with representatives from the local authorities and other Government agencies on 31 January last. Since then we have had numerous fruitful contacts with the local authorities and their cooperation in this matter is much appreciated.

My officials have also been in contact with the EU Commission on the application for State Aid approval for the Initiative and this process is expected to be concluded shortly.

I would expect that I will be in a position to make an announcement in the near future.

Tax Relief Application

Questions (188)

John Deasy

Question:

188. Deputy John Deasy asked the Minister for Finance if he will consider increasing the tax relief available under the home renovation incentive scheme in the forthcoming budget. [32994/14]

Written answers

Minister for Finance

As the Deputy is aware, I introduced the Home Renovation Incentive (HRI) in Budget 2014. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence. In order to qualify for the tax credit, the works must be carried out by legitimate contractors and the homeowner must also be property tax compliant. A minimum of €4,405 excluding VAT must be spent on qualifying works. This threshold can be reached over a number of jobs. Relief is available on qualifying expenditure up to a maximum of €30,000, excluding VAT. The tax credit is payable over the two years following the year in which the work is paid for.

The aim of the incentive is to stimulate increased activity in the construction sector and boost employment. It is aimed at supporting fully tax compliant builders and moving activity out of the shadow economy into the legitimate economy as all expenditure and relief claims have to be registered electronically with the Revenue Commissioners.

It is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions. However, as with all tax reliefs, the HRI will be considered as part of the forthcoming Budget and Finance Bill and any announcements will be made on Budget Day.

Tax Relief Costs

Questions (189)

Ruth Coppinger

Question:

189. Deputy Ruth Coppinger asked the Minister for Finance the amount income tax relief on pensions has cost the Exchequer in 2012 and 2013; and the percentage that benefited those on the higher and lower rates of income tax respectively. [33040/14]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the cost to the Exchequer of income tax relief relating to private pension contributions for 2012 and 2013 is not yet available. The following table provides a breakdown of the estimated cost for 2011, the latest year for which data are available.

It should be borne in mind that the costing of tax and other reliefs in the pensions area may suggest a significant notional loss in terms of tax foregone as compared with the savings that might be expected if the tax relief was not available. However, where tax relief arrangements are of such significance, the removal of the reliefs would represent a fundamental adjustment to the tax system and would have significant economic and behavioural impacts implications. These impacts are difficult to model in advance and the costing of tax reliefs should be treated with some caution.

I have also been informed by the Revenue Commissioners that a breakdown of the cost of tax relief by reference to income tax rates is not readily available. Employers' returns to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level.  There is, therefore, no basis for providing the breakdown requested.

Estimate of the cost of certain tax reliefs for private pension provision	2011 - Estimated costs
**	€ Million
Employees' Contribution to approved Superannuation Schemes	584
Employers' Contribution to approved Superannuation Schemes	142
Estimated cost of exemption of employers' contributions from employee BIK	532
Retirement Annuity Contracts (RACs)	164
Personal Retirement Savings Accounts (PRSAs)	72
TOTAL	1,494

Tax Relief Costs

Questions (190)

Ruth Coppinger

Question:

190. Deputy Ruth Coppinger asked the Minister for Finance the cost of mortgage interest relief to the Exchequer in 2012 and 2013; the amount of that total benefited those paying the higher and lower rates of income tax; and the average annual cost of mortgage interest relief per household and per income tax payer. [33041/14]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the cost to the Exchequer of mortgage interest relief for principal private residences by way of tax relief at source (TRS) in the years 2012 and 2013 is as follows:

Tax Year	Cost - €m	Number of Claimants
2012	411	508,200
2013*	353	492,700

*This figure is provisional and subject to revision.

A breakdown of the above amounts by those paying the higher and lower rates of income tax is not readily available. Mortgage interest relief is provided by way of the TRS system, regardless of whether the individual has an income tax liability or not. Therefore, information on the income of individuals in receipt of mortgage interest relief is not necessary for the administration of the granting of TRS. An estimate could only be provided by undertaking an extensive review of Revenue records and would likely require further development of the Revenue forecasting model. Furthermore, I am advised by the Revenue Commissioners that they are unable to provide an average annual cost of mortgage interest relief per household.

NAMA Portfolio

Questions (191)

Ruth Coppinger

Question:

191. Deputy Ruth Coppinger asked the Minister for Finance the number of complete and incomplete houses and apartments in the National Asset Management Agency’s portfolio; the amount of each that have been made available for social housing; if he will provide a breakdown of the number of these that have been and are being made available directly to local authorities, or to approved housing bodies; and if he will provide a breakdown of the approved housing bodies concerned. [33042/14]

Written answers

Minister for Finance

NAMA acquired a loan portfolio which was secured, among other assets, by some 14,000 completed residential units. I am advised by NAMA that it has identified 5,445 houses and apartments as being available, through its debtors and receivers, for social housing.  Through a process agreed with the Minister for the Environment, Community and Local Government and the Minister for Housing and Planning, NAMA provided the Housing Agency with a list of the 5,445 properties and continues to update that list as additional, potentially suitable, properties become available.  Local authorities, in turn, confirm through the Housing Agency whether or not they have a demand for any given property that NAMA has made available.

Through this process, local authorities have confirmed demand for 2,077 of the 5,445 properties made available by NAMA.  Over 700 of these properties have been delivered to date and NAMA expects that it will exceed its target of delivering a total of 1,000 properties for social housing by end-2014.  NAMA advises that the remaining properties for which demand has been confirmed will be delivered over the following period.  Further detail on this initiative is available on the Housing Agency's website, www.housing.ie/NAMA.aspx and in the NAMA Annual Report and Financial Statements for 2013, which is available on the NAMA website, www.nama.ie.

NAMA's exposure to completed residential property in Ireland is limited.  In total, including the 5,445 properties made available for social housing, there are currently about 15,000 residential units within the Agency's portfolio.  These properties have either been made available for social housing as outlined above or are currently let in the private rented market or are for sale.  In all these instances, the properties are contributing to meeting current housing needs.  As new housing is completed, it is immediately brought to the market by NAMA.  NAMA advises that it does not withhold completed housing stock from sale or rental.

Promissory Notes

Questions (192)

Ruth Coppinger

Question:

192. Deputy Ruth Coppinger asked the Minister for Finance his anticipated repayment schedule for the debt formerly in the form of promissory notes; the anticipated cost in interest payments and the total repayment cost as currently projected; and the preferences of the European Central Bank in this regard. [33044/14]

Written answers

Minister for Finance

Subsequent to the liquidation of Irish Banking Resolution Corporation the Central Bank acquired €25 billion of Floating Rate Notes (FRNs) and €3.46 billion of Government Fixed Coupon 2025 bonds.  The Bank undertook to sell the combined portfolio of the FRNs and the fixed rate bond as soon as possible provided the conditions of financial stability permit.  The Bank also indicated that, as a minimum, it will make sales in accordance with the following schedule: to end 2014 (€0.5 billion), 2015-2018 (€0.5 billion per annum), 2019-2023 (€1 billion per annum), and 2024 on (€2 billion per annum until all bonds are sold).  The Bank's 2013 Annual Report notes that sales have been made from this combined portfolio, with the Bank selling €350mn of its holdings of the Government 2025 Fixed Rate Bond in 2013.  The timing of the sales is a matter for the Central Bank which may elect to sell bonds at a particular time if it feels that this is the best course of action, for example, in order to take advantage of favourable market conditions.

Security of the Elderly

Questions (193, 195)

Jonathan O'Brien

Question:

193. Deputy Jonathan O'Brien asked the Minister for Finance if his attention has been drawn to the fact that many older persons have received notification that they are now liable to pay VAT on all personal security alarms, placing an immediate 23% increase on the cost of these alarms which are no longer subsidised through the telephone allowance; if these personal alarms given under the seniors alert scheme, could be classified as eligible for a refund of VAT as a necessary aid for communication and mobility considering these devices are vital for their continued mobility, safety and ability to remain at home. [33056/14]

Arthur Spring

Question:

195. Deputy Arthur Spring asked the Minister for Finance the way a personal alarm monitor (details supplied) is liable to VAT at a higher rate due to the fact that it is not a luxury item; and if he will make a statement on the matter. [33110/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 193 and 195 together.

I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply.  In the circumstances, the supply of personal alarms is liable to VAT at the standard rate, currently 23%.  The supply of parts and accessories and monitoring fees are also liable to VAT at the standard rate.

I am also advised that, under Value-Added Tax (Refund of Tax) (No. 15) Order 1981, VAT paid on qualifying goods may be refunded where the goods are purchased for the exclusive use of disabled persons suffering a specified degree of disablement.  The Order applies to goods which are aids or appliances, including parts and accessories, which might reasonably be treated as constructed or adapted having regard to the particular disablement of the person.  A personal alarm for a disabled person may qualify for relief under the Order if it may be considered an aid or appliance constructed or adapted for use by a disabled person having regard to the particular disablement of that person.  The Order applies only to goods so services, such as a monitoring service, are not included in the Order.  A Claim Form VAT 61A is available on the Revenue website (www.revenue.ie).

Tax Credits

Questions (194)

Finian McGrath

Question:

194. Deputy Finian McGrath asked the Minister for Finance the reason the single person child carer credit does not apply to the child and a child living with their parent who is in a cohabitation position is exempt from this tax credit (details supplied); and if he will make a statement on the matter. [33087/14]

Written answers

Minister for Finance

As the Deputy is aware, the One-Parent Family Tax Credit (OPFTC) has been replaced with the Single Person Child Carer Credit from 1 January 2014.   However, the reformed credit is more targeted in that it is, in the first instance, only available to the primary carer of the child.

Given the difficult fiscal environment, it is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them. 

The Commission on Taxation acknowledged that the previous One Parent Family Tax Credit played a role in supporting and incentivising the labour market participation of single and widowed parents.  However, in its recommendations it concluded that the credit should be retained but that it should be allocated to the primary carer only. The restructuring of the credit achieves such an outcome.

There is no specific tax credit for children in the tax code. Therefore, married or cohabiting couples are unable to avail of any additional credit to assist them in the financial maintenance of their children.

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), on the basis that the relevant child is not, in the main, being cared for by a single person. 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.

Question No. 195 answered with Question No. 193.

Pension Provisions

Questions (196)

Jim Daly

Question:

196. Deputy Jim Daly asked the Minister for Finance if he will consider amending legislation to allow persons who are financially struggling to survive to draw down early all or a portion of a retirement pension fund which was set aside in better times; and if he will make a statement on the matter. [33133/14]

Written answers

Minister for Finance

There are a number of reasons why, under existing policies, pre-retirement access to the main benefits from pension plans or schemes is not permitted, the principal one being that these arrangements (and the associated tax reliefs on contributions and pension fund growth) are designed to be long term savings vehicles based on the principle that the benefits will be "locked away" to help fund an adequate income in retirement.

Section 782A of the Taxes Consolidation Act 1997 provides members of occupational pension schemes with a once-off opportunity to access their Additional Voluntary Contributions (AVCs), pre-retirement. The option is available for a three year period from 27 March 2013, the date that the Finance Act 2013 was passed into law.

The pre-retirement access to a portion of AVCs which I introduced in Budget and Finance Act 2013 is allowed on a tax-neutral basis. The contributions were tax-relieved at the individual's marginal rate on the way in and are taxed at the individual's marginal rate on withdrawal. The take-up of the measure to date has not been particularly significant. The measure is, however, designed to enable rather than incentivise individuals to access part of their pension savings beyond their regular or compulsory pension contributions. It is important that individuals continue to provide for their retirement and, it would appear, most individuals with AVCs have to date decided to preserve their AVC pension savings. For these various reasons, I have no plans to extend pre-retirement access to pension savings beyond what is provided for in relation to AVCs.

Revenue Commissioners Investigations

Questions (197)

Gerry Adams

Question:

197. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 215 of 8 July 2014, if he will confirm that the importer (details supplied) at no time was given the opportunity to facilitate the examination of their container and was simply told to pay the fee of €650 plus VAT to have their container released and examined; his views that this is acceptable in view of the fact that the customer was entitled to be present when the goods were examined; if he agrees with the process whereby the Revenue Commissioners place an arbitrary charge for those containers they deem fit to examine even in circumstances when they find nothing wrong with the goods; if he will detail the guidelines given to freight compound operators to determine the fees that they charge in respect of such examinations; if he will consider giving the Revenue Commissioners a role in the setting of the charges involved; to detail what the Revenue Commissioners considered in this case to be the basis for recommending a physical examination of this importer's container and what was the risk criteria relevant to this case; if he will consider waiving the fees for physical examinations of such containers and allow the Revenue Commissioners to carry out these examinations on the premises of the importer to obtain a better view of the nature of the business they are involved in, and in a similar way that the Revenue Commissioners carries out VAT audits of small businesses and having found nothing untoward they do not charge for the audit. [33143/14]

Written answers

Minister for Finance

Further to my previous response to the Question No. 215 of 8 July 2014, the Revenue Commissioners have advised that the importer in question employed a Customs clearance agent to handle the import process, as is normal practice for the importation of goods. The decision by Revenue to examine this container was conveyed to the Customs clearance agent employed by the importer. The decision on whether or not the importer (or the declarant) wishes to be present during the examination is a matter between the importer and the agent and is not a matter for the Revenue Commissioners.

In relation to the premises used for examination of goods, Article 239 of Commission Regulation (ECC) No 2454/93 states:

The goods shall be examined in the places designated and during the hours appointed for that purpose by the customs authorities.

However, the customs authorities may, at the request of the declarant, authorise the examinations of goods in places or during hours other than those referred to in paragraph 1.

Any costs involved shall be borne by the declarant.

Each freight compound operator is obliged by Revenue, under the terms of his conditions of approval to operate such a compound, to have proper examination facilities in place for the conduct of Customs examinations.

The decisions regarding the selection of import agent, the routing of the goods, and the freight compound through which the goods were imported are decisions that are made by the importer or persons acting on his behalf.

The Customs Code provides that the declarant is responsible for any costs incurred in the examination process and compound operators generally raise a charge for this service. As advised in the reply to Question No. 215 on 8 July, 2014, the costs for the provision of the examination facilities and for stripping and repacking containers are costs determined by the freight compound operators. There are three freight compound operators in Dublin Port. The Deputy will appreciate that it would be inappropriate for the Revenue Commissioners to have a role in the setting of commercial charges between competing businesses.

Officers from Revenue's Customs Service carry out a wide range of functions and interventions to ensure that Ireland's import and export trades are facilitated as effectively and efficiently as possible, but with due regard to the wide range of control measures in place to prevent the illegal importation of goods, and to ensure that the correct customs duties are paid. It would not be practicable from cost, resource management or risk management perspectives to facilitate the physical examinations of containers at the widely dispersed nationwide locations of importers.

Revenue carries out a risk analysis on all consignments coming from outside the EU.  This analysis is based on a range of criteria that includes assessing risk such as food and product safety, counterfeit goods, fiscal, illicit drugs and tobacco smuggling.  In addition to the risk based interventions, Revenue is also obliged under EU legislation (Commission Regulation (EEC) No 2454/93, Chapter 5, Article 4f, 2), to implement a program of random interventions. The Deputy will understand that the specific risks that trigger interventions in any particular case are confidential.

With reference to the Deputy's reference to VAT audits and other related interventions, these are generally inspections of the taxpayers books and  records, and are conducted by correspondence or in the taxpayers place of business.  In general these interventions do not involve inspection of goods or stock in transit.  Where costs are incurred in relation to these interventions (e.g. accountant or tax advisor charges), such costs are borne by the  taxpayer.

VAT Payments

Questions (198)

Finian McGrath

Question:

198. Deputy Finian McGrath asked the Minister for Finance if he will support a matter (details supplied) regarding VAT on carbon tax; and if he will make a statement on the matter. [33186/14]

Written answers

Minister for Finance

Section 37(1) of the Value-Added Tax Consolidation Act 2010, provides that the amount on which VAT is chargeable is the total consideration receivable by the supplier, "including all taxes, commissions, costs and charges whatsoever" but not including the VAT itself.  VAT is governed by the EU VAT Directive, with which Irish VAT law must comply.  Article 78 of the VAT Directive provides that the taxable amount shall include "taxes, duties, levies and charges, excluding the VAT itself".

In this respect, where a supply of service, such as a gas bill, includes carbon tax, VAT law dictates that VAT should be calculated on the carbon tax element of the bill as well as the charge for the service.

Guidance in relation to the VAT treatment of the total consideration receivable by a supplier is set out in the VAT Guide.  This publication is available on the Revenue website at www.revenue.ie.

Departmental Staff Data

Questions (199)

Seán Fleming

Question:

199. Deputy Sean Fleming asked the Minister for Finance the number of staff who retired, left or otherwise departed from their employment from 1 July 2013 to 31 December 2013, and the expected annual savings arising therefrom; the number of staff expected to leave in 2014, and the annual expected savings therefrom; the number of staff expected to leave in 2015, and the annual savings therefrom; the number of staff expected to leave in 2016, and the annual savings therefrom; and if he will make a statement on the matter. [33204/14]

Written answers

Minister for Finance

The number of staff who retired, resigned or otherwise departed from my Department from 1 July 2013 to 2014 is outlined in the following table. My Departments current staffing levels are consistently below the ECF ceiling. The filling of any vacancies will be dictated by our strategy and the ECF. Savings, if any, will be minimal.

Year	Number of Staff
1 July   31 December 2013	18 of which 9 were not on the department's payroll
1 January   12 September 2014	21 of which 3 were not on the department's payroll
13 September   31 December 2014	1

Staff departures in relation to 2015 and 2016 are difficult to predict. However the following number of staff are expected to retire from my Department in 2015 and 2016.

Year	Number of staff
2015	3
2016	4

Departmental Staff Recruitment

Questions (200)

Seán Fleming

Question:

200. Deputy Sean Fleming asked the Minister for Finance the number of new staff employed since 1 July 2013 up to 31 December 2013 and the expected annual costs arising therefrom; the expected number to be employed in 2014 and the estimated annual cost arising therefrom; the expected number to be employed in 2015 and the estimated annual cost arising therefrom; the expected number to be employed in 2016 and the estimated annual cost arising therefrom; and if he will make a statement on the matter. [33221/14]

Written answers

Minister for Finance

The number of new staff employed since 1 July 2013 to 31 December 2013 and the expected number to be employed in 2014 are shown in the table. The salaries of all staff within my Department fully adhere to pay guidelines issued by the Department of Public Expenditure and Reform.

Year	Number of Staff
1 July   31 December 2013	8 of which 5 were not on the department's payroll
1 Jan   12 September 2014	19 of which 2 were not on the department's payroll
13 September   31 December 2014	2; In addition 5 positions are currently in the recruitment process and it is expected that the successful candidates will be in situ before the end of 2014
2015	We cannot fully estimate the recruitment needs of the Department for 2015 at this time
2016	We cannot fully estimate the recruitment needs of the Department for 2016 at this time

Pension Provisions

Questions (201, 202, 208)

Olivia Mitchell

Question:

201. Deputy Olivia Mitchell asked the Minister for Finance if he will extend the approved retirement fund options to pensioners with a personal retirement bond; and his views on correspondence (details supplied) regarding the issue. [33256/14]

Brendan Griffin

Question:

202. Deputy Brendan Griffin asked the Minister for Finance his views on increasing revenue from the approved retirement fund (details supplied). [33258/14]

Arthur Spring

Question:

208. Deputy Arthur Spring asked the Minister for Finance if he will consider permitting the approved retirement fund option, available to most pensioners, accessible to personal retirement bond holders considering that many members of wound up defined benefit schemes had their funds transferred to PRBs. [33300/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 201, 202 and 208 together.

As they each relate to the issue of  access to the Approved Retirement Funds (ARFs) option for holders of Buy-out Bonds (BOBs).

By way of background, ARFs were introduced by Finance Act 1999 to provide control, flexibility and choice to holders of personal pensions and to proprietary director members of occupational pension schemes in relation to the drawing down of benefits from their pension plans. Prior to that Act, any person taking a pension from a Defined Contribution (DC) scheme or a Retirement Annuity Contract had no choice but to purchase an annuity with their remaining pension pot after drawing down the permissible tax-free retirement lump sum. The ARF arrangement extended the options at retirement so that, in addition to the annuity option, the balance of a pension fund could be taken in cash (subject to tax, as appropriate) or be invested in an ARF, subject to certain conditions.

The ARF option was extended, in Finance Act 2000, to the part of an employee's occupational pension fund built up from Additional Voluntary Contributions (AVCs) and most recently, in Finance Act 2011, it was further extended to cover an employee's entire pension fund where the fund is a defined contribution (DC) occupational pension scheme. The 2011 extension which applied with effect from 6 February 2011 (the date of passing of the Act), was in respect of DC schemes approved by the Revenue Commissioners, on or after that date, under Chapter 1 of Part 30 of the Taxes Consolidation Act 1997. Where DC occupational pension schemes had been approved by Revenue prior to that date, the legislation provided that the extension of the ARF option in such cases was conditional on the scheme rules being amended to allow a scheme member exercise the option. Earlier this year, I agreed to a proposal that the Revenue Commissioners will allow access to the ARF option for all holders of BOBs, the values in which have been transferred from DC schemes, regardless of the date of transfer.

The 2011 Finance Act, did not, however, extend the ARF option to the main scheme benefits of defined benefit (DB) occupational schemes as this option was not intended for DB scheme benefits, generally.

I am advised by the Revenue Commissioners, that pension retirement bonds, otherwise known as Buy-out-Bonds (BOBs), are single premium insurance policies effected by the trustees of an occupational pension scheme on behalf of a scheme member, as an alternative to providing a preserved retirement benefit under the scheme for that member. They are used in circumstances where a scheme member is leaving service and opts for a transfer value, on the wind-up of a scheme or where pension splitting arises in the context of a Pension Adjustment Order. BOBs are approved by the Commissioners on a generic, rather than on an individual basis, in the form of a standard bond policy document, under Chapter 1 of Part 30 of the TCA 1997 as DC products. However, in the view of the Commissioners, BOBs are not occupational pension savings vehicles in the normally accepted sense for example, an individual with a BOB cannot make contributions to the BOB. Rather, they are a specialist pension vehicle to deal with the specific situations described above.

I am further advised by the Commissioners that it has always been a condition of approval of generic BOB policies that the benefits to be provided to an individual under such policies be subject to the same restrictions and conditions that applied to the occupational pension scheme from which the transfer to the BOB originated. This includes access to the ARF option. The entitlement to the ARF option, in effect, travels with the transfer value paid into the bond and the fact that the BOB is considered a DC pension product does not, of itself, give entitlement to the ARF option from the BOB as of right. Thus, prior to the Finance Act 2011 changes, the ARF option only applied to benefits under a BOB where the bond holder could have availed of the option under the originating occupational pension scheme, e.g. that the bond holder was a proprietary director before leaving service or that part of the originating transfer represented AVCs. There was no alteration in this position insofar as BOBs originating from DB schemes is concerned following the Finance Act 2011 and more recent administrative changes.

The issues around allowing access to the ARF option for BOBs whose values have transferred from DB pension schemes are broader than the tax policy considerations for which I have responsibility and are matters of general pension policy for which my colleague, the Tánaiste and Minister for Social Protection, Ms Joan Burton TD, has responsibility. I understand that both the Tánaiste and the Pensions Authority have concerns that the extension of the ARF option as being suggested could have fundamental implications for the DB model and potentially impact both on the Funding Standard and on the benefit promise to DB scheme members.  However, I further understand that the issue of ARF access for BOBs originating from DB schemes will be considered by the Tánaiste's Department in the context of a review of personal pension vehicles aimed at rationalising provision in this area. It is expected that this review will be undertaken in the near future.

Betting Regulations

Questions (203, 204)

Michael McGrath

Question:

203. Deputy Michael McGrath asked the Minister for Finance if bets on roulette games in licensed bookmakers' premises are subject to VAT; and if he will make a statement on the matter. [33281/14]

Michael McGrath

Question:

204. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners are conducting any investigations into potential outstanding liabilities on the part of licensed bookmakers in respect of gaming activities on licensed premises; and if he will make a statement on the matter. [33282/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 203 and 204 together.

The regulatory framework for betting is provided for in the Betting Act, 1931, which falls within the remit of my colleague the Minister for Justice, Equality and Law Reform.  Under this regulatory framework, licensed bookmakers are not permitted to offer any services other than betting in a registered bookmaking premises.  Enforcement of this prohibition is a matter for An Garda Síochána.

I am advised by the Revenue Commissioners that, in accordance with Chapter 1 of Part 2 of the Finance Act 2002, betting duty is payable by a bookmaker who makes, lays or otherwise enters into any bet with a person at that bookmaker's registered premises.    VAT is not payable on any transaction subject to betting duty.

I am also informed by the Revenue Commissioners that, as for all businesses, compliance checks are undertaken on bookmakers to ensure that all taxes are declared and paid.  These checks form part of Revenue's Compliance Programme which is constantly reviewed to ensure it is focussed on areas of greatest risk.  Cash businesses have been and continue to be a specific focus for Revenue attention. Revenue have informed me that in 2013 they carried out 156 compliance interventions into betting and gaming operators yielding €2.8m; in the eight month period to end August 2014, 163 interventions were undertaken yielding €5.1m.

Revenue has also informed me that they are aware of a potential for cross-over between betting and gaming in the services offered by bookmakers and that they have been examining the issue with a view to providing guidance to the industry. This guidance will be available in advance of the application of betting duty to remote bookmaking and betting intermediary services following enactment of the Betting (Amendment) Bill, which is currently before the Oireachtas.

Question No. 205 answered with Question No. 184.

Mortgage Protection Policies

Questions (206)

Arthur Spring

Question:

206. Deputy Arthur Spring asked the Minister for Finance his views that a universal mortgage insurance model should be introduced. [33292/14]

Written answers

Minister for Finance

The Government's construction strategy includes a desire for a return to sustainable levels of mortgage lending as part of a healthy market. This involves the consideration of measures to stimulate the development of housing. In Ireland's housing market, over the last few years, lending volumes have declined dramatically. More recently, commentators have been highlighting the lack of supply of houses, in certain urban areas, as a contributing factor for the lack of drawdown of approved mortgage facilities.  The Government is prepared to consider initiatives that would aid  and facilitate the supply of new homes, in particular for young families. 

In other jurisdictions, such as the UK and Canada, "mortgage insurance" markets have been developed to support bank mortgage lending, particularly to 'First Time Buyers'. Mortgage insurance allows banks to share the risk of mortgage lending, either with public sector or with private sector insurance companies with the aim of increasing bank lending in general or to target groups.

My Department is committed, under the Construction 2020 strategy, to examine the concept of a mortgage insurance scheme and how it might benefit new housing completions in the Irish market. The objective of any scheme would be to ensure adequate availability of mortgage finance on affordable terms for new completions, particularly for 'First Time Buyers', as the economy recovers. Of particular interest is the means by which such schemes can support greater levels of investment in new housing, with the associated benefits for the construction sector and ultimately for the consumer.

Tax Exemptions

Questions (207)

Arthur Spring

Question:

207. Deputy Arthur Spring asked the Minister for Finance if the rent a room scheme should be altered in order that only income above the €10,100 amount should be taxed and not the whole amount if the income exceeds the €10,100 amount. [33293/14]

Written answers

Minister for Finance

Section 216A of the Taxes Consolidation Act 1997 provides for the rent-a-room scheme. This scheme was introduced in Finance Act 2001 as an incentive to encourage individuals to let rooms in their principal private residence in order to bring about an increase in the availability of rental accommodation, particularly for the student sector.

The scheme provides an exemption from Income Tax, PRSI and USC on rent received where a person rents out a room or rooms in his or her principal private residence and the rent received does not exceed €10,000 per year. This was increased from €7,620 in Budget 2008. 

In order to qualify for the exemption, it is necessary for the residential premises to be situated in the State and occupied by the individual as his or her sole or main residence during the tax year.

The relief only applies to individuals. It does not apply to companies or partnerships. In addition, an individual cannot avail of the relief in respect of payments for accommodation in the family home by a child of the individual. There is no restriction where rent is paid by other family members, for example, nieces or nephews.

The latest figures available relate to the tax year 2012 when the cost of the relief was estimated at €5.9 million and was availed of by 4,073 claimants. This equates to rental income of €22.9 million. The corresponding 2011 cost was €5.6m and was availed of by 3,920 claimants.  

An exemption from tax of €10,000 equates to rent received of approximately €833 per month. Figures provided by the Revenue Commissioners indicate that the majority of claims relate to rent received of less than €4,000 per annum or €333 per month:

Rent Receivable	Number
€9,001 - €10,000	512
€8,001 - €9,000	360
€7,001 - €8,000	441
€6,001 - €7,000	332
€5,001 - €6,000	655
€4,001 - €5,000	569
€4,000 & lower	1,204

Therefore, to raise the limit could be unwarranted. However, as with all tax reliefs, the rent-a-room scheme will be considered as part of the forthcoming Budget and Finance Bill.

Question No. 208 answered with Question No. 201.

Tax Exemptions

Questions (209)

Stephen Donnelly

Question:

209. Deputy Stephen S. Donnelly asked the Minister for Finance in relation to section 18 of the Finance Act 2013 which amends section 87B of the Taxes Consolidation Act 1997, in the case of sole traders who receive a write-down on development loans or go bankrupt, if it is intentional that the full amount of the write-off now becomes taxable at 55% in the year of the write-off; and if he will make a statement on the matter. [33302/14]

Written answers

Minister for Finance

One of the main purposes of section 18 of the Finance Act 2013 is to correct an anomaly which, up until that time, allowed land dealers and developers to potentially obtain a tax deduction in circumstances where they suffered no real economic loss. The provision applies only in very specific circumstances by effectively clawing back a tax deduction, which the taxpayer obtained, arising from the decline in land and property values where the loans taken out to acquire this land and property have been written down by the lending institution and are no longer required to be repaid.  This debt write down may have arisen through negotiation with the taxpayer, as a result of bankruptcy or personal insolvency or by virtue of the terms of the loan agreement itself. In these circumstances, it is the lending institution, not the borrower, who has actually suffered the loss.

 The provision only applies to those engaged in the trade of dealing in or developing land. It has no relevance to loans used to purchase a person's principal private residence or to landlords, in respect of rental properties, because no tax deduction was available to these people in the first place. It only applies to loans used to acquire land held as trading stock.  Where a land dealer acquires land with borrowed money and the land subsequently falls in value, the land dealer is entitled to a deduction equal to the fall in value, in computing the profits of the landing dealing trade. This deduction can reduce the taxable profits of the trade.  Where it results in a tax loss, that loss can be carried forward against future profits of the same trade or set off  for tax purposes against other income in the year the loss arises. However, where the land has been purchased with borrowed money and the loan is subsequently written off, the trader has not suffered any economic loss. Section 18 deals with this by treating the dealer as having received an income equal to the write down.  The effect of this is to cancel out the deduction already claimed. This is not an additional charge but a clawback of a relief which is no longer justified.  Where the fall in the value of the land has resulted in a trading loss which has been carried forward by the taxpayer, the loss will cancel the charge imposed by section 18 and no further tax should arise. However, if the deduction has been used to reduce tax on other income of the taxpayer in previous years, then tax will arise. This represents a clawback of a relief granted in respect of a tax loss where there is no economic loss. The rate of tax which will apply will depend on the person's level of income in that year.

European Central Bank

Questions (210)

Michael McGrath

Question:

210. Deputy Michael McGrath asked the Minister for Finance if Ireland will continue to be a full voting member of the ECB governing council when Lithuania joins the currency area; and if he will make a statement on the matter. [33308/14]

Written answers

Minister for Finance

Lithuania will join the euro in January 2015.  They will become the nineteenth member of the euro area and this will trigger a change in the voting rights as envisaged by the Governing Council in December 2002. 

Currently, the ECB's Governing Council consists of the six members of the Executive Board, plus the governors of the national central banks of the 18 euro area countries.  However, once the euro area reaches 19 members, a rotation principle will apply for all national central bank governors.   Governors will be allocated to groups based on the size of their economy and financial sector.

The first group will comprise of the 5 largest countries which are Germany, France, Italy, Spain and the Netherlands and they will share four votes.   The remaining 14 central bank governors, which includes Ireland, will be grouped together and they will share 11 votes. 

The Governors take turns using the rights on a monthly rotation.  However, all members of the Governing Council will attend the meetings and have the right to speak.  In addition, most decisions of the Governing Council are made on a consensual basis and in a spirit of cooperation.

Tax Code

Questions (211)

Michael McGrath

Question:

211. Deputy Michael McGrath asked the Minister for Finance the taxation provisions currently in legislation that are due to expire at the end of 2014; and if he will make a statement on the matter. [33320/14]

Written answers

Minister for Finance

The following provisions are due to expire at the end of 2014:

Legislative Provision	Brief Description
Section 285A of the Taxes Consolidation Act 1997	Provides an acceleration of wear and tear allowances for companies in respect of energy-efficient equipment that meets certain energy-efficient criteria and is specified on a list of approved products.
Section 486C of the Taxes Consolidation Act 1997	Provides relief from corporation tax for a company that commences a new trade and is available where the total corporation tax payable for an accounting period does not exceed €40,000. Marginal relief is available where the corporation tax payable is between €40,000 and €60,000.
Section 486B of the Taxes Consolidation Act 1997	Provides tax relief for corporate investment in certain renewable energy projects.
Section 531AN of the Taxes Consolidation Act 1997	The exemption from the top rate of USC for those on medical cards, who's aggregate income does not exceed €60,000 per annum, is due to expire at the end of this year. These individuals are subject to USC at a reduced rate of 4% on their income above €16,016, compared to the general taxpayer who pays at 7% on income over €16,016.  The 3% USC surcharge, which imposes a 10% USC rate on self-assessed income in excess of €100,000 per annum, is also scheduled to expire at the end of this year. The expiry of these provisions was legislated for by the previous Government. I can assure the Deputy that they will be subject to a full examination, as part of preparations for the Budget and Finance Bill and will not be allowed to lapse without significant consideration of the matters involved.
Section 604A of the Taxes Consolidation Act 1997	Provides relief from capital gains tax on future disposals of land or buildings acquired in the period 7 December 2011 to 31 December 2014.
Section 823A of the Taxes Consolidation Act 1997	Provides for a tax relief by way of a deduction in respect of income earned by an individual in certain foreign states (otherwise known as the "foreign earnings deduction" or FED). This scheme is currently being reviewed in the context of the forthcoming Budget.
Section 825C of the Taxes Consolidation Act 1997	Provides for a tax relief on income earned by an employee who is assigned to work in Ireland (otherwise known as SARP).   While the relief applies for a 5 year period, individuals who come to the State from the tax year 2015 onwards would not qualify for the relief. This scheme is currently being reviewed in the context of the forthcoming Budget.
Section 135C of Finance Act 1992	Provides for remission or repayment on Vehicle Registration Tax of up to €1,500 in respect of hybrid electric vehicles, up to €2,500 in respect of plug-in hybrid electric vehicles, up to €5,000 in respect of electric vehicles while series production electric motorcycles are exempt from VRT.
Regulation 16 of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994	Under the Disabled Drivers and Disabled Passengers (Tax Concessions) (Amendment) Regulations 2014, I have revoked, with effect from 31 December 2014, Regulation 16 of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 which provides for the repayment of excise duty on fuel to qualifying persons.  I propose to introduce a grant scheme with effect from 1 January 2015 to replace the excise relief.
Schedule 1 of the Stamp Duties Consolidation Act 1999	Consanguinity relief applies to transfers of non-residential property to certain relatives, e.g. parent, grandparent, step-parent, child, foster-child, adopted child, brother, sister, half-brother/sister, aunt, uncle, niece, nephew. Stamp Duty is charged at half the normal rate. This relief applies to transfers of non-residential property executed on or before 31 December 2014 and does not apply to leases or transfers of shares.
Section 481 (film relief) of the Taxes Consolidation Act 1997	The current scheme expires at the end of 2014 but it is being replaced by a new scheme in 2015.

IBRC Mortgage Loan Book

Questions (212)

Michael McGrath

Question:

212. Deputy Michael McGrath asked the Minister for Finance the position in relation to any unsold Irish Bank Resolution Corporation residential mortgages; if individual borrowers will be given the opportunity to bid for their loans; his views on this issue; and if he will make a statement on the matter. [33329/14]

Written answers

Minister for Finance

The Special Liquidators are in the process of implementing a sale process for the remaining unsold Irish Bank Resolution Corporation residential mortgages. The sales process plan and timeline for the sale of the portfolio has been developed following professional advice and in light of requirements for a robust and credible sales process. The Special Liquidators have given significant consideration to and have sought independent advice in relation to how the unsold residential mortgages are to be dealt with. 

Following that independent advice and the Borrower representations made, the Special Liquidators have decided that the unsold residential mortgage would be sold in two separate portfolios with a view to maximising market interest and return. This process is ongoing and the Special Liquidators have written to borrowers with unsold loans to inform them of the further sales process in respect of their loans.

As such,  I am advised by the Special Liquidators that they will not be accepting any bids from individual mortgage holders, however mortgage holders are permitted to buy-out their mortgage at par value and that there are no legislative barriers for such Borrowers to do so.

Pension Levy

Questions (213, 235, 240)

Kieran O'Donnell

Question:

213. Deputy Kieran O'Donnell asked the Minister for Finance his plans for reviewing the pensions levy; and if he will make a statement on the matter. [33351/14]

Finian McGrath

Question:

235. Deputy Finian McGrath asked the Minister for Finance if he will remove the pension levy as many families with special needs children are under immense pressure (details supplied); and if he will make a statement on the matter. [33559/14]

Thomas P. Broughan

Question:

240. Deputy Thomas P. Broughan asked the Minister for Finance the options being considered by his Department in the context of budget 2015 regarding the complete removal or the reform of the pension levy. [33642/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 213, 235 and 240 together.

I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 would be abolished from the 31st of December 2014. However, I introduced an additional levy on pension funds at 0.15% for 2014 and 2015 to, among other things, continue to help fund the Jobs Initiative.

The reduced VAT rate of 9% on tourism and certain other services was one of the very significant and successful measures introduced by the Jobs Initiative. It was due to end in 2013. In my Budget 2014 speech I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax is being reduced to zero with effect from 1 April 2014. The 9% VAT rate has helped to create 15,000 new jobs as well as protecting existing jobs. Since the Budget announcement about the reduction in the Air Travel Tax, airlines have announced the opening up of new routes resulting in significant increases in passenger numbers with the associated increase in tourism activity and employment.

The additional 0.15% levy for 2014 and 2015 will also be used to help make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties although funds from the levy will not be hypothecated or specifically set aside for this purpose. The Government has decided that such liabilities will be met by the Exchequer as they arise.

I am conscious of the significant contribution of taxpayers, generally, to the rebalancing of the public finances and the measures introduced to support and develop the economy. There has been progress in these areas. These efforts are ongoing, including the continuation of measures in the Jobs Initiative, designed to improve the economic environment by providing the means to encourage job creation in areas of our economy most likely to deliver that employment in the shortest timeframe possible.

Preparations for Budget 2015 and the consequent Finance Bill are ongoing. It would not be appropriate for me to comment on what changes, if any, are being considered in the pension fund levy or any other tax measure.