Written Answers Nos. 60-65
60. Deputy Eric Byrne asked the Minister for Finance if legislation will be introduced to tackle and prevent vulture funds from claiming more than other lenders in the case of sovereign debt crises; and if he will make a statement on the matter. [15901/15]
View answerThere are no proposals to legislate the actions of so called "vulture funds" in the case of sovereign debt crises. Ireland along with all Eurozone members now includes Collective Action Clauses (CAC) in the sovereign bonds it issues. Such clauses provide for a standardised mechanism for the renegotiation of the debt instruments in certain circumstances. The clauses are designed to deal with default in a structured fashion and prevent minority investors "holding out" for a better pay-out than the majority.
61. Deputy Terence Flanagan asked the Minister for Finance his views on correspondence (details supplied) regarding tax credits; and if he will make a statement on the matter. [15903/15]
View answerThe decision on the approval of a mortgage for a borrower, which includes interest rate, is a commercial decision for the lending institution concerned. It is important that each lending institution is allowed to assess properly and independently the risks that it is considering when deciding to approve a loan. I do not interfere with such commercial decisions.
Mortgage lending decisions must be undertaken on a sustainable and prudential basis by financial institutions and conform fully to the regulatory requirements, both in relation to the financial institution itself, and also with regard to the safeguarding of the borrower's interests.
While mortgage interest relief is being phased out, it may have relevance to the situation outlined in the details supplied. In Supplementary Budget 2009, it was limited so that interest payable on a qualifying home loan would only qualify for tax relief for the first seven tax years of the life of that loan (7 year rule). However, in Finance Act 2010, it was extended up to the end of 2017 for those whose entitlement to relief was due to end in 2010 or after (i.e. those who purchased in 2004 or after). Accordingly, individuals who took out qualifying loans in the period 2004 to 2012 will continue to be entitled to mortgage interest relief up until the end of 2017.
It should be noted that, where there is an entitlement to mortgage interest relief, it is available at varying rates and subject to certain ceilings. For example, individuals who are in the first seven tax years of their qualifying loan are entitled to a higher interest ceiling, on which the rate of relief is applied. For such individuals, the interest ceilings are €10,000 per annum for a single individual and €20,000 per annum for married couples and civil partnerships. For individuals who have an entitlement to mortgage interest relief and who are in their eighth or subsequent years of their qualifying loan, a lower interest ceiling applies. For such individuals, the interest ceilings are €3,000 per annum for a single individual and €6,000 per annum for married couples/civil partnerships. Therefore, some individuals will experience a reduction in the level of relief they receive as they enter into their eighth and subsequent years of their qualifying loans. However, they will continue to receive mortgage interest relief up until the end of 2017.
The system of mortgage interest relief is designed and targeted in such a way that the relief is of greater value in the early years of a qualifying loan where the interest represents a greater proportion of the repayment. Mortgage interest relief is of lesser value to individuals whose repayments are made up of a higher proportion of principal than interest, as would generally be the case for those who move in to the eighth and subsequent years of their loans. Furthermore, the relief is proportionate to the amount of mortgage interest paid, up to the relevant ceiling. Therefore, the greater the amount of interest payable, the greater the relief available, subject to the previously outlined ceilings for relief.
This Government is very conscious of the significant concerns and difficulties faced by homeowners, not least in relation to their mortgages. In addition, the Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, I announced my intention to fulfil the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period. A mortgage holder will qualify for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period. As the Deputy will be aware, mortgage interest relief has been abolished for mortgages take out since 1 January 2013.
In the particular case specified, I would have concerns that the introduction of such a credit would merely allow financial institutions to further increase standard variable rates, with the benefit of any tax relief transferring to financial institutions with no net cost reduction for the relevant mortgage holders. Therefore, I am not predisposed towards the introduction of such a tax credit.
62. Deputy Maureen O'Sullivan asked the Minister for Finance if he is committed to continuing Government taxpayer support in the form of the deliberate transfer of public resources, achieved by reducing tax obligations with respect to a benchmark tax or reducing or postponing revenue, in support of the credit union movement; if credit unions will continue to be tax exempt in respect of corporate surpluses and reserves; if tax exemption for the income of credit unions will be continued; if these privileges will continue to extend not only to existing credit unions but also to new aggregated credit unions and to credit union representative organisations; and if he will make a statement on the matter. [15905/15]
View answerI am advised by the Revenue Commissioners that credit unions that are registered, or deemed to be registered, under the Credit Union Act 1997 are exempt from Corporation Tax by virtue of section 219A of the Taxes Consolidation Act 1997.
Credit unions are not-for-profit member owned financial co-operatives funded primarily by member deposits and existing to attain the economic and social goals of their members. They cannot conduct business with the general public and must deal solely with their members who share a common bond such as where they live or work. Surplus monies generated by business activities belong to the members and distribution of any surplus may take a number of forms including; allocating to members in proportion to their transactions; the development of common services to benefit all members and the community; or the development of the business of the credit union.
The Government recognises the important role of credit unions whose not-for-profit mandate, community focus and dedication of their volunteers ensure that they continue to be a central part of our community.
I have no plans at this time to change the exemptions currently in place.
63. Deputy Brendan Griffin asked the Minister for Finance if there are any circumstances where capital acquisitions agriculture relief will be extended to a person who earns marginally in excess of the income threshold; and if he will make a statement on the matter. [15908/15]
View answerCapital Acquisitions Tax (CAT) is the overall name for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or, inherited by, the beneficiary of the gift or inheritance.
I am informed by the Revenue Commissioners that, for the purposes of CAT, the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary), determines the maximum life-time tax-free threshold known as the "Group threshold" below which gift or inheritance tax does not arise.
There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.
Group A: tax free threshold €225,000 applies where the beneficiary is a child (including adopted child, stepchild, and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
Group B: tax free threshold €30,150 applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.
Group C: tax free threshold €15,075 applies in all other cases.
The importance of agriculture in the Irish economy is well recognised. In this context, a specific relief from CAT is provided for gifts and inheritances of agricultural property once certain conditions are satisfied. This relief is known as Agricultural Relief. The aim of the relief is to ensure the active use of agricultural land. The relief takes the form of a reduction in the market value of the agricultural property by 90% for the purposes of establishing whether or not a CAT liability arises on the gift or inheritance.
In order to qualify for Agricultural Relief, the beneficiary of the gift or inheritance must satisfy the following conditions:
- 80% of the beneficiary's total overall assets must consist of agricultural property by value after receiving the gift or inheritance.
- The beneficiary of the gift or inheritance must also either have an agricultural qualification (a qualification of the kind listed in Schedule 2, 2A or 2B of the Stamp Duties Consolidation Act 1999) or, alternatively, must farm the agricultural property on a commercial basis for not less than 50% of his or her normal working time.
- The beneficiary must farm the agricultural property for a period of not less than 6 years after receiving the gift or inheritance or lease the agricultural property for a period of not less than 6 years, subject to the lease and the lessee also satisfying the conditions of the relief.
The income of the beneficiary is not relevant to CAT Agricultural Relief and there is no income threshold to be met by the beneficiary in order to avail of the relief.
64. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 163 of 15 April 2015, if he will provide, for each given year, the components of the figures provided for the impact of Irish Water on surplus and deficit, showing all measurers included as revenue or as expenditure. [15917/15]
View answerFurther to Parliamentary Question No. 163 of 15 April 2015 the breakdown of income and expenditure utilised in the previous calculations regarding the impact of the current treatment of Irish Water can be summarised within the following table (all figures in €m):
|
- |
2014 |
2015 |
2016 |
|
Domestic Tariff |
0 |
271 |
274 |
|
Non-domestic Revenue |
248 |
229 |
240 |
|
Total Revenue |
248 |
500 |
514 |
|
Opex (including Interest) |
778 |
799 |
785 |
|
Capex |
323 |
681 |
601 |
|
Total Expenditure |
1,101 |
1,480 |
1,386 |
|
Balance |
-853 |
-980 |
-872 |
|
less support from LGF and Exchequer1 |
515 |
399 |
479 |
|
Irish Water balance (impact on deficit) |
-338 |
-581 |
-393 |
Source: Department of Environment
1 This includes consolidation of transactions between Irish Water and Local Authorities.
It should be noted that the Local Government Fund (LGF) and Exchequer support would be incurred regardless of the classification of Irish Water and are deducted in order to assess the overall impact on the deficit of Irish Water being classified in general government.
65. Deputy Sean Fleming asked the Minister for Finance when an application under the disabled drivers and disabled passengers regulations 1994 will be approved in respect of a person (details supplied) in County Laois; and if he will make a statement on the matter. [15925/15]
View answerThe legislation governing the Drivers & Passengers with Disabilities Scheme is contained in Section 92 of the Finance Act 1989 (as amended), Section 134(3) of the Finance Act 1992 (as amended) and Statutory Instrument No. 353 of 1994 (Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994). Full details of the scheme, including the legislative criteria which must be met, are set out in Information Leaflet VRT 7 which is available from the Revenue website www.revenue.ie.
The Regulations specify that tax relief under the scheme is restricted to a vehicle purchased from an authorised person. An authorised person means a person authorised under Section 136 Finance Act 1992 such as, for example, a car dealership.
I am advised by the Revenue Commissioners that the person concerned applied for tax relief under the scheme on 3 December 2014 and submitted supporting documentation, showing that the vehicle was bought privately from the previous owner. The person concerned was advised on 16 December 2014 that the vehicle did not qualify under the scheme on the grounds that it was not purchased from an authorised dealer as required by law.
The person has lodged an appeal under Section 145 of Finance Act 2001. The first stage of the appeals process consists of the re-examination of the matter by a senior manager within Revenue who was not involved in the original decision. A decision on this appeal is expected shortly. If the person is dissatisfied with the outcome of this first stage of the appeals process, he may apply, within 30 days of being notified of the first stage appeal decision, to have his case heard by the Appeal Commissioners.
