Written Answers Nos. 72-81
72. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied regarding the adequacy of the availability of working capital to the hotel and catering industry; and if he will make a statement on the matter. [24047/15]
View answerThe Government recognises that small businesses, including those in the hotel and catering industry, play a central role in the sustainable recovery of the Irish economy. To facilitate this, Government policy since 2011 has been focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.
The Government understands the importance of the hotel and catering industry and have been supportive with measures such as the new 9% VAT rate, the Gathering Ireland 2013, the reduced 0% Air Travel Tax and the Visa Waiver. In addition I extended the Employment and Investment Incentive to include hotels, guest houses and self-catering accommodation in recent Budgets.
Recent CSO figures indicate that overseas trips to Ireland increased by 14.1% for the first quarter in 2015 while total tourism and travel earnings from overseas travellers to Ireland increased by 11.6% compared to the first quarter in 2014.
My Department has been involved in a range of initiatives to encourage access to credit for small and medium sized businesses, and the SME State Bodies Group, which includes representation from Fáilte Ireland, provides a forum for the development and implementation of policy measures to enhance SMEs' access to a stable and appropriate supply of finance.
The following provides an overview of some other incentives introduced by Government to encourage access to credit for small business:
- The Strategic Banking Corporation of Ireland has been established to encourage small business, as an additional means of ensuring that SMEs are provided with sufficient access to credit, with increased flexibility such as loans of longer duration and loans with built-in payment holidays. SBCI loans are currently available through AIB and BOI and subsequent phases will see the SBCI supporting smaller, existing bank and non-bank funding providers and bringing in new participants to the Irish market.
- The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs.
- The Microenterprise Loan Fund, administered by Microfinance Ireland, was established under the Action Plan for Jobs and can provide loans of up to €25,000 to small businesses who have been refused credit by commercial banks. Microfinance Ireland works in partnership with the Local Enterprise Offices LEOs nationally to administer this fund.
- The Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to €3 million declined or reduced by either Bank of Ireland or Allied Irish Banks, and who feel that they have a viable business proposition. The Ulster Bank have recently joined the Credit Review office on a non-statutory and voluntary basis. The Credit Review Office also examine cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Reviewer John Trethowan and his team have overturned 55% of the refusals that have been appealed to the Office. Further details are available at www.creditreview.ie
- With over €2bn of Government supports available to small business in Ireland from over 20 Departments and Agencies, it is vital that SMEs can quickly access information on this range of supports available to them. With this in mind, the Supporting SMEs Online Tool, a cross-government initiative, was launched in May 2014. On answering 8 simple questions, the small business will receive a list of available Government supports. The Supporting SMEs Online Tool is available at www.localenterprise.ie/smeonlinetool.
The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth. Consequently the Department of Finance, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit with a view to taking appropriate actions as warranted to ensure that SMEs in Ireland have the opportunity to reach their full potential in terms of growth and employment generation. In this context, the Action Plan for Jobs 2015 includes a dedicated chapter and associated integrated set of actions to support the financing for growth in the SME sector.
73. Deputy Terence Flanagan asked the Minister for Finance if he has concerns that Dublin property owners will have to pay a substantial amount of local property tax (details supplied); and if he will make a statement on the matter. [24123/15]
View answerI am very conscious of the concerns of homeowners, particularly those in urban areas, as regards increasing property prices and the effects this would have on their LPT liabilities.
With a view to addressing these concerns, I have asked former public servant Dr. Don Thornhill, who chaired the 2012 Inter-Departmental Group which designed the Local Property Tax (LPT), to conduct a review to consider, and make recommendations, on the operation of the LPT, and any impacts on LPT liabilities due to property price developments.
In particular the Review will have regard to:
- Recent residential property price developments,
- The overall yield from LPT and its contribution to total tax revenue on an ongoing basis, and
- The desirability of achieving relative stability, both over the short and longer terms, in LPT payments of liable persons.
It is intended that the Review be presented to me no later than summer 2015, with a view to consideration of any recommendations therein in the context of the Budget.
74. Deputy Michael McGrath asked the Minister for Finance if the minutes of the Irish Bank Resolution Corporation's credit committee were included in the monthly board packs sent by the bank to his Department; if so, when his Department began to receive the minutes of the corporation's credit committee; and if he will make a statement on the matter. [23979/15]
View answerAs the Deputy will be aware the terms of reference of the proposed Commission of Investigation in relation to IBRC include the following explicit term of reference dealing with information received by the Department of Finance:
"in relation to each transaction under investigation, whether the Minister for Finance or his Department was kept informed where appropriate in respect of the transactions concerned, and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them."
Both Houses of the Oireachtas have approved these terms of reference. It is important that I do not interfere with or prejudice the important work to be conducted by the Commission of Investigation. In those circumstances I have received legal advice that it would be inappropriate for me to comment publicly in respect of information received from IBRC in relation to the various transactions under review.
75. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 71 of 10 June 2015, when the Irish Bank Resolution Corporation commenced the practice of sending monthly board packs to his Department. [23980/15]
View answerAs the Deputy will be aware the terms of reference of the proposed Commission of Investigation in relation to IBRC include the following explicit term of reference dealing with information received by the Department of Finance:
"in relation to each transaction under investigation, whether the Minister for Finance or his Department was kept informed where appropriate in respect of the transactions concerned, and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them."
In those circumstances I have received legal advice that it would generally be inappropriate for me to comment publicly in respect of information received from IBRC in relation to the various transactions under review. However in this instance, as the information has already been publically disclosed, I am in a position to answer the question posed.
The Department of Finance began receiving Board Packs from Anglo/IBRC in August 2011. Prior to this the Board Packs were sent to the NTMA as the NTMA Banking Unit was responsible for receiving the board packs prior to that unit being seconded to the Department of Finance.
76. Deputy Brendan Griffin asked the Minister for Finance if he will provide, in tabular form, the current number of employees with income over €100,000; the percentage of income tax these employees pay; and if he will make a statement on the matter. [24017/15]
View answerI wish to inform the Deputy that the current number of employees in my Department with income over €100,000 is 9.
The percentage of income tax these employees pay is a matter between themselves and the Revenue Commissioners.
77. Deputy Pearse Doherty asked the Minister for Finance if he will provide a list of all available tax reliefs associated with property; the rationale for such tax reliefs; the number of persons availing of them; and the cost to the Exchequer in the past full tax year. [24027/15]
View answer81. Deputy Dessie Ellis asked the Minister for Finance if he will provide a list of all tax reliefs available associated with property; the rationale for the tax relief; the number of persons availing of the tax relief; and the cost to the Exchequer in the past full tax year. [24082/15]
View answerI propose to take Questions Nos. 77 and 81 together.
I am advised by the Revenue Commissioners that within the tax code there are a significant range of tax reliefs associated with property. All reliefs, including property related reliefs, are a cost to the exchequer and in a report on tax expenditures published by my Department last October I set out this Government's tax policy basis in relation to future tax expenditures. The Government will:
- Support economic growth by ensuring that any increase in taxation be effected in the first instance by base broadening including through the elimination or curtailment of overly-generous, poorly targeted or otherwise unaffordable tax reliefs;
- Use tax reliefs only in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention;
- Time-limit all tax expenditures and subject those with higher costs to ex ante evaluation; and
- Conduct a regular programme of reviews of tax reliefs, engaging in public consultation as appropriate, and publish the results.
I propose to provide an analysis of the property reliefs under each Tax and Duty heading. Unless otherwise stated the figures relate to the year 2013.
Income Tax/Corporation Tax Reliefs
The following table is a list of the property based incentive schemes qualifying for capital allowances. It should be noted some of these figures are provisional. While the majority of these schemes have been terminated, (capital allowances have been retained for expenditure on hotels, holiday camps, holiday hostels, guest house and registered caravan and camping sites at a rate of 4% per annum over 25 years.) tax relief may continue to be claimed on expenditure incurred prior to the termination date in question.
|
Scheme |
Number of Claimants |
Tax Cost €m |
|
Urban Renewal |
2,618 |
45.4 |
|
Town Renewal |
739 |
10.6 |
|
Seaside Resort |
272 |
2.1 |
|
Rural Renewal |
2,098 |
17.9 |
|
Multi-storey car parks |
57 |
3.0 |
|
Living Over the Shop |
43 |
0.5 |
|
Student Accommodation |
522 |
11.5 |
|
Enterprise Areas |
104 |
1.9 |
|
Park and Ride |
19 |
0.7 |
|
Hotels |
1,015 |
35.2 |
|
Holiday Cottages |
572 |
11.0 |
|
Holiday Hostels |
5 |
0.09 |
|
Guest Houses |
6 |
0.07 |
|
Nursing Homes |
411 |
10.7 |
|
Housing for the Elderly/Infirm |
98 |
1.4 |
|
Convalescent Homes |
12 |
0.5 |
|
Qualifying Hospitals |
357 |
9.2 |
|
Qualifying Mental Health Centres |
* |
* |
|
Qualifying Sports Injury Clinics |
81 |
1.4 |
|
Buildings used for certain Childcare Purposes |
296 |
4.2 |
|
Buildings or structures in registered Caravan & Camping sites |
* |
* |
|
Mid-Shannon Corridor Tourism Infrastructure Investment Scheme |
* |
* |
* is displayed in where the cost/number of claimants is negligible.
As statistics were not captured separately for Third Level Educational Buildings and the Countrywide Refurbishment Scheme (both now terminated) these have not been included. Also not included are the ordinary industrial buildings e.g. mill/factory (4%), and airport runways/buildings (4%) as statistics are not captured separately for these either.
Home Renovation Incentive (HRI)
This scheme provides a tax relief by way of an income tax credit on repair, renovation or improvement works on principal private residences or rental property carried out by tax compliant contractors. In addition to providing an income tax relief, the HRI also aims to support tax compliance in the building industry by moving activity out of the shadow economy into the legitimate economy.
The year 2014 was the first full year in which the incentive operated. The incentive came into operation on 25 October 2013 and will run until 31 December 2015. Rental properties were brought within the scheme from 15 October 2014.
Since the introduction of the incentive, works on 21,722 properties have been notified to Revenue's HRI online system (as of 12 June 2015). This represents more than €458 million worth of works involving some 5,286 contractors. The potential total cost to the Exchequer in respect of these properties is approximately €31m. As a claim for the HRI credit can only be made in the year after works have been paid for, there was no cost to the Exchequer in 2014 (works paid for in the period from 25 October 2013 to 31 December 2013 were deemed to have been paid for in 2014). The number of claims made in the period from 1 January 2015 to 12 June 2015 is 7,673, representing a total cost to the Exchequer of approximately €14.69m. This cost will be split evenly between 2015 and 2016.
Additional Income Tax Reliefs
Other property based reliefs include interest relief on loans to acquire a principal private residence, relief for rental payments on private tenancies (terminated for any new cases after 7 December 2010*) the rent-a-room relief and relief for expenditure on significant buildings or gardens. The cost of the reliefs and the number claiming the relief are set out on the attached table:
|
Year 2013 |
Number of claimants |
Cost €m |
|
Mortgage interest relief for PPRs |
498,000 |
353.0 |
|
Rent paid for private tenancies |
153,100 |
37.9 |
|
Rent-a-room relief |
4,370 |
5.9 |
|
Expenditure on significant buildings or gardens |
120 |
2.1 |
*Individuals who were in receipt of the relief at 7 December 2010 may continue to claim it until 2017
Capital Gains Tax Reliefs
For the purpose of capital gains tax there are three significant property based reliefs, the property purchase incentive, the Principal Private Residence relief and the farm restructuring relief.
Property purchase incentive
This relief was introduced in the Finance Act 2012. The relief applies to properties purchased between 7 December 2011 and 31 December 2014. For the relief to apply, the property must be owned for a period of at least 7 years. The rationale for the relief was to encourage investment in Irish property at a time when the property market was at low ebb.
Principal Private Residence Relief
This relief is available for individuals disposing of a house which was occupied by them as their only or main residence. Full relief is given where the house has been so occupied for the entire period of ownership of the house apart from the last 12-month period which is deemed to be a period of occupation by the owner. Where the house has been occupied by an individual for part of the period of ownership, only the portion of the gain that corresponds to the period of occupation is exempt. The rationale for the relief is to ensure that the sale of a house, which will generally be replaced with another house, can be done on a tax-neutral basis.
Farm restructuring relief
This relief was introduced in the Finance Act 2013. The relief applies where the first transaction in the restructuring - for example, the sale, purchase or exchange of land is carried out in the period commencing on 1 January 2013 and ending on 31 December 2016 and where the restructuring is completed within 24 months of that first transaction. The rationale for the relief is to facilitate the consolidation of land holdings, thereby increasing the productivity of those land holdings.
There is no statistical information available for the numbers availing of the Principal Private Residence relief and the farm restructuring relief or their cost to the exchequer. The property purchase incentive had no cost to the exchequer in the past full year since the entitlement to avail of the relief will not arise until a future point in time.
Capital Acquisitions Tax
The property based reliefs available for the purposes of capital acquisitions tax are set out on the table:
|
Relief |
Rationale for relief |
Number |
Cost €m |
|
Reduction of 90% in market value of agricultural property |
To encourage entrepreneurial activity and to prevent the forced sale of farms to pay significant CAT liabilities.* |
1,581 |
70.3 |
|
Reduction of 90% in market value of business property |
To encourage entrepreneurial activity and to prevent the forced sale of businesses to pay significant CAT liabilities.* |
495 |
94.1 |
|
Exemption from CAT on the inheritance or gift of a residential property where the beneficiary has lived in the property as a sole or main residence for a specified period both before and after the inheritance/gift. |
To ensure that what may be the family home for many people will not be liable to CAT when it is the subject of a gift or inheritance. |
619 |
N/A |
|
Spouses and civil partners |
Gifts and inheritances of property between spouses and civil partners are exempt from CAT. |
24 |
N/A |
|
Public or charitable purposes |
To exempt from CAT gifts/inheritances of property where the property is applied for purposes that are public or charitable. |
N/A |
N/A |
|
Heritage properties |
To exempt from CAT gifts/inheritances of houses/gardens that are of national, historic or artistic interest and where there are reasonable viewing facilities offered to the public. |
N/A |
N/A |
* The estimated cost for the agricultural and business reliefs are particularly tentative because of the potential interaction between these reliefs and the normal thresholds for CAT liability which are determined by the relationship between disponer and disponee.
"N/A" indicates "not applicable".
Valued Added Tax
The VAT Consolidation Act 2010 provides for the making of Orders whereby VAT that has been paid may be refunded in certain circumstances. Three Refund Orders provide for the possibility of recovering VAT associated with property.
- VAT Refund Order (No. 15) of 1981 allows for certain construction costs incurred in the adaptation of a house for certain qualifying disabled persons. The Order does not allow for the initial construction cost of a house.
- Refund Order (No. 29) of 1996 allows for VAT refunds/remission for qualifying accredited diplomatic personnel who purchase property for use as embassies/consulates and also for use as their principal private residences.
- SI 201 of 2012 provides for refunds of VAT for farmers on the construction, extension, alteration or reconstruction of farm buildings which are used solely or mainly in the farming business.
Each of the Refund Orders provides for relief for a number of areas of expenditure, including the property costs, so it is not possible to provide the cost to the Exchequer that relates solely to the property costs.
Local Property Tax
In relation to local property tax the following table sets out the exemptions and reliefs available:
|
Local Property Tax (LPT) exemptions |
Rationale for exemption |
|
Properties fully subject to commercial rates |
To provide relief for owners of properties that may be fully liable for both LPT and commercial rates charged by a local authority. |
|
Long term mental or physical infirmity |
To provide relief for owners of properties who are unable to continue living in their property because of a long-term mental or physical infirmity and where those properties are vacant. An exemption is also available for nursing homes that are used exclusively for the care of such persons. |
|
Owned and sold by builders and developers |
To provide relief for builders and developers who have built properties with the intention of selling them but that were not yet sold or rented out or occupied as a residence at the time of the first liability date of 1 May 2013. In the event of a sale before the next liability date of 1 November 2016, the exemption continues to be available for the purchasers of such properties. |
|
Special needs accommodation |
To provide relief for charitable and social housing bodies who own properties that are made available to persons who require special accommodation and support to enable them to live in the community because of old age, physical or mental infirmity or other reason. |
|
Recreational activities |
To provide relief for charitable bodies who own properties that are used solely as residential accommodation to facilitate recreational activities in the course of carrying out the body's main purpose. |
|
First time buyers |
To provide relief, following the termination of mortgage interest relief, for persons who purchased properties during 2013 and who occupy the properties as their sole or main residence. |
|
Unfinished housing estates |
To provide relief, as had been done in relation to the Household Charge, to owners of properties that were located in housing estates that were certified as 'unfinished' by the Minister for the Environment, Community and Local Government. |
|
Pyrite damage |
To provide relief to owners of properties that have been appropriately certified as having been damaged to a significant extent by pyrite. |
|
Incapacitated persons |
To provide relief for owners of properties that have been acquired or adapted because of their suitability, or to make them suitable, for occupation by persons who are totally and permanently incapacitated from maintaining themselves by earning a living from working and whose condition dictates the type of property they can live in. |
|
Reduced chargeable value of property |
Rationale for reduction in chargeable value |
|
Property adapted for occupation by certain disabled persons |
To provide relief for owners of properties who have had to incur expenditure on construction or adaptation work to make the properties suitable for occupation by certain disabled persons where the work has the effect of increasing the value of the properties so that they move into a higher LPT valuation band with a higher tax liability. |
|
Deferral of payment of LPT |
Rationale for deferral |
|
Income threshold |
To provide relief for persons whose annual income does not exceed a specified threshold by allowing them to defer payment of either the full or partial LPT liability until their circumstances improve or their property ceases to be owned by them. |
|
Estate of deceased person |
To provide relief for executors and administrators of a deceased person's estate to give them an opportunity to transfer ownership of any residential property to a beneficiary or to sell the property and distribute the proceeds of sale. |
|
Insolvency |
To provide relief for persons who have entered into certain formalised insolvency arrangements for the management of their debts until such time as the arrangements cease to have effect. |
|
Hardship |
To provide relief for persons who suffer a significant financial loss or incur a significant expense that are unexpected and unavoidable and as a result of which are unable to pay their LPT liability. |
In relation to the LPT exemptions, I am advised by the Revenue Commissioners that the cost to the Exchequer for 2014, the most recent year available, is estimated to be €12 million in total. Exemptions have been claimed for around 39,600 properties. LPT deferrals have resulted in delayed LPT receipts estimated at €7 million in 2014. Claims for deferral have been made in respect of around 24,300 properties for 2014. I am further advised that costs for individual exemptions or deferrals are not available at this time.
Stamp Duty
Finally, the table below sets out the relief or exemption from stamp duty for transactions associated with property.
Stamp Duties Consolidation Act 1999 Exemptions and reliefs from stamp duty:
|
Section |
Relief |
Rationale for relief |
Numbers |
Cost €m |
|
Section 79 |
Associated companies |
Exemption from stamp duty is available where property is transferred between companies with a significant degree of common ownership |
1,237 |
€3,841 |
|
Section 81AA |
Young trained farmers |
Exemption from stamp duty is available to encourage the early transfer of farmland to young farmers with approved educational qualifications. |
812 |
€4.7 |
|
Section 82 |
Charitable bodies |
Exemption from stamp duty is available where property is transferred or leased to a charitable body. |
589 |
€3.5 |
|
Section 82B |
Approved sports bodies |
Exemption from stamp duty is available where land is transferred to an approved sports body where the land is used for the sole purpose of promoting athletic or amateur games or sports. |
65 |
€0.2 |
|
Section 82C |
Pension schemes and charitable bodies |
Exemption from stamp duty is available where property is transferred by pension schemes and charitable bodies |
13 |
€1.3M |
|
Section 93 |
Industrial and provident societies |
Exemption from stamp duty is available where a house is transferred or leased by a registered industrial and provident society to a member of the society for the purpose of providing housing for members of the society. |
N/A~ |
N/A |
|
Section 93A |
Approved voluntary body |
Exemption from stamp duty is available where land is transferred or leased to a voluntary body for the purpose of providing social housing. |
45 |
€0.08 |
|
Section 94 |
Land Commission |
Exemption from stamp duty is available where land is purchased from the Land Commission |
N/A |
N/A |
|
Section 95 |
Commercial woodlands |
Partial relief from stamp duty is available to encourage the sale or lease of land on which trees have been planted as a commercial undertaking. |
108 |
€12 |
|
Section 96 |
Spouses and civil partners |
Exemption from stamp duty is available where property is transferred between spouses and civil partners. |
3,579 |
€9.1 |
|
Section 97 |
Dissolution of a marriage |
Exemption from stamp duty is available where property is transferred on foot of a court order between divorced spouses and between civil partners where the civil partnership has been dissolved or annulled |
405 |
€0.6 |
|
Section 97A |
Cohabitants |
Exemption from stamp duty is available where property is transferred on foot of a court order from one cohabitant to his or her cohabitant. |
< 10 |
* |
|
Section 98 |
Foreign property |
Exemption from stamp duty is available in respect of transfers of property that is situated outside the State. |
N/A |
N/A |
|
Section 99 |
Dublin Docklands Development Authority |
To encourage development in the docklands area of Dublin, exemption from stamp duty is available where land is acquired by the Dublin Docklands Development Authority |
< 10 |
* |
|
Section 99A |
Courts service |
Exemption from stamp duty is available where land is acquired by the Courts Service. |
< 10 |
* |
|
Section 100 |
Temple Bar Properties Limited |
To encourage development in the Temple Bar area of Dublin, exemption from stamp duty is available where land is acquired or leased by Temple Bar Properties |
N/A |
N/A |
|
Section 103 |
Shared ownership leases |
Exemption from stamp duty is available to assist those on low incomes to purchase their own homes under a shared ownership lease. |
< 10 |
* |
|
Section 106A |
National Building Agency Limited |
Exemption from stamp duty is available where land is transferred or leased to the National Building Agency Limited for social housing purposes |
N/A |
N/A |
|
Section 106B |
Housing authorities and Affordable Homes Partnership |
The stamp duty charge is capped at €100 where property is transferred or leased to certain social housing bodies. |
599 |
€0.7 |
|
Section 106C |
Grangegorman Development Agency |
To encourage development at Grangegorman, exemption from stamp duty is available where land is acquired or leased by the Grangegorman Development Agency |
N/A |
N/A |
|
Section 108AA |
Strategic Banking Corporation of Ireland |
Exemption from stamp duty is available where property is transferred or leased to the Strategic Banking Corporation of Ireland which was established by the Minister for Finance to improve the supply of funds to SME's. |
N/A |
N/A |
|
Section 108B |
National Asset Management Agency |
Exemption from stamp duty is available where property is transferred or leased to the National Asset Management Agency |
N/A |
N/A |
|
Section 108C |
Ireland Strategic Investment Fund |
Exemption from stamp duty is available where property is transferred or leased to a Fund Investment Vehicle under the control of the NTMA |
N/A |
N/A |
|
Schedule 1 |
Consanguinity relief |
A 50% reduction in the rate of stamp duty encourages early transfers of farmland to certain relatives who will actively carry on farming activities. |
3,973 |
€6.9 |
"N/A" indicates "not applicable"
* indicates that, where the numbers are less than 10, the costs are not provided on the basis of protecting confidentiality.
78. Deputy Joanna Tuffy asked the Minister for Finance if he will provide an update on the percentage of the value of inherited property that capital acquisitions tax was paid on (details supplied); and if he will make a statement on the matter. [24063/15]
View answerI am advised by the Revenue Commissioners that €356m was paid in respect of capital acquisitions tax for the year 2014. A breakdown of this total by gift tax, inheritance tax, probate tax and discretionary trust tax is available on the Revenue Commissioners' statistics website at http://www.revenue.ie/en/about/statistics/cat-receipts.pdf. The most recent year for which this information is available is 2014 and updates will be published in due course. However, they are not in a position to provide the figure requested by Deputy Tuffy. The source of their information on the value of inherited property are the returns that persons, who are liable for the payment of capital acquisitions tax (CAT), are required to make when property is transferred under a deceased person's will or intestacy. These returns do not contain information in respect of all such properties. There are a number of reasons for this.
In common with most other taxes, CAT operates on a self-assessment basis. Several of the tax exemptions that are available are taken on a self-assessment basis and the person who inherits the property is not required to submit a return to Revenue. For example, information in respect of property transferring between spouses and civil partners, from deceased children to parents and to charitable bodies does not have to be submitted to Revenue as tax exemption is taken on a self-assessment basis.
The relationship between the deceased person and the person who inherits a property determines the maximum life-time aggregate tax-free threshold below which CAT is not charged. There are, in all, three separate relationship thresholds (set out below). The value of each of a person's inheritances since 5 December 1991 is aggregated and CAT is charged, where the aggregate value exceeds the relevant threshold, on any amount that exceeds the threshold. However, it is only where the value of property inherited by a beneficiary exceeds 80% of the relevant threshold (or the actual threshold) that a return has to be submitted to Revenue.
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 deceased person. This threshold also applies to parents where they inherit an absolute interest in a property from a child.
Group B: tax free threshold €30,150 applies where the beneficiary is a brother, sister, nephew, niece, lineal ancestor (for example, a grandparent) or lineal descendant of the deceased person.
Group C: tax free threshold €15,075 applies in all other cases, for example, from uncle to niece, between in-laws and persons with no relationship to each other.
Apart from the absence of the information requested by the Deputy, other considerations are also relevant. CAT is not an 'estate' tax in the sense that it does not apply to the value of a deceased person's entire estate. Rather, it is a tax on the value of property inherited by an individual beneficiary. This means that a high value property, if inherited jointly by several beneficiaries, may be below the individual tax-exempt thresholds for those beneficiaries and, therefore, not liable for the payment of CAT.
Significant relief from the payment of CAT is available where farmland and other business property is inherited. Where certain conditions are met, for example, in relation to the use to which the farm/property is put following the inheritance, the market value of the farm/property may be reduced by 90% before CAT is charged.
79. Deputy Anthony Lawlor asked the Minister for Finance if he is aware of Allied Irish Banks' plans to outsource work and staff from its application and development management teams within the information technology division to third party providers; if he is confident that any such move would not pose a risk to key areas such as payment processing and online banking, as was demonstrated by failures in Ulster Bank; the assurances he will provide that jobs will be protected in the bank's plans to outsource this work; and if he will make a statement on the matter. [24064/15]
View answer97. Deputy Paul Murphy asked the Minister for Finance his views on the planned outsourcing of the application and development management section of the information technology department in Allied Irish Banks; his views regarding the outsourcing of a key sector of the Department that deals with core functions of the bank's operations; if a risk assessment has been carried out on the outsourcing to the bank's operations; his further views on the consultations with unions and staff; his views on the matter of outsourcing of staff in the bank; and if he will make a statement on the matter. [24205/15]
View answer98. Deputy Olivia Mitchell asked the Minister for Finance further to Parliamentary Question No. 340 of 9 June 2015, if he is aware that previous outsourcing two years ago has resulted in the redundancy of all those Allied Irish Banks staff, except three or four persons, and that it is this experience that is causing concern regarding the latest outsourcing proposals; and if he will make a statement on the matter. [24219/15]
View answerI propose to take Questions Nos. 79, 97 and 98 together.
As I have previously stated under the Relationship Frameworks the State does not intervene in the day to day operations of the banks in which it holds investments or their management decisions regarding commercial matters and hence any discussions around matters such as outsourcing are a matter for the bank, the relevant staff and their union representatives. Notwithstanding this position, my officials do take an active interest in how the bank's cost base evolves to ensure that the State's interests as shareholder are protected and to ensure that the Government's remuneration policy is enforced.
The bank has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have also been informed by the bank that there have been no compulsory redundancies as a result of its recent outsourcing activities. Any staff who transfer under outsourcing arrangements transfer under the TUPE regulations.
In the case of previous outsourcing arrangements the same TUPE regulations would also have applied to the staff affected.
80. Deputy Clare Daly asked the Minister for Finance his views regarding his previous commitments that prior to the summer recess he would have sorted out the anomaly in the statutory instrument and legislation which means that owners of home that have pyrite have to undertake a hardcore infill test analysis, costing thousands of euro, in order to claim their lawful entitlement to a property tax exemption. [24070/15]
View answerThe Deputy will be aware that I have initiated a review of the operation of the Local Property Tax (LPT).
The Review will primarily have regard to recent residential property price developments, the overall yield from LPT, and the desirability of achieving relative stability in LPT payments. It will also address a number of issues which have arisen in relation to the efficient and effective administration of the LPT, including the operation of the pyrite exemption provisions.
Resolution of this matter may necessitate a change in the relevant provisions of the LPT legislation and/or the Pyrite Regulations. If so, I will examine the scope for the implementation of any changes on an administrative basis, in advance of such legislative amendments.
It is intended that the outcome of the Review will be presented to me no later than summer 2015.
