Written Answers Nos. 283-302
283. Deputy Terence Flanagan asked the Minister for Finance his views on concerns that homeowners are being charged €150 by private companies to sign pyrite certification required by the Revenue Commissioners (details supplied); and if he will make a statement on the matter. [28694/15]
View answerSection 10A of the Finance (Local Property Tax) Act 2012 (as amended) provides for a temporary exemption of at least three years from the charge to Local Property Tax (LPT) for residential properties that have been certified under Regulations made by the Minister for the Environment, Community and Local Government (S.I. No 147 of 2013) as having "significant pyritic damage".
The Regulations also specify the assessment methodology that must be applied to confirm the presence of significant pyrite damage, including that the Building Condition Assessment must be carried out by a qualified competent person (I.S. 398-1:2013). The Regulations also clearly specify the type of certification that must be produced before an exemption from LPT can be granted. This is the only type of certificate that is relevant under current legislation. The Revenue Commissioners have no role in determining the cost of acquiring the certificate and have no discretion to apply an exemption from LPT on foot of any other type of supporting documentation.
In regard to the specific case to which the Deputy refers, I am advised that the property owner in question has not produced the required certificate confirming 'significant pyritic damage', which legally prohibits the Revenue Commissioners from allowing the LPT exemption to apply.
The person has however recently made direct contact with the Revenue Commissioners requesting additional time to acquire the correct certificate and this has been agreed to. The Commissioners have assured me that all compliance activity has been put on hold to allow the person adequate time to follow up on the issue.
The Deputy may be aware that I have initiated a review of the operation of LPT. This review is being conducted by Dr Don Thornhill and is due to be presented to me no later than summer 2015. 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 however also address a number of matters relating to the administration of LPT, including the operation of the pyrite exemption provisions.
A resolution to the pyrite issues may necessitate a change in the relevant provisions of the Finance (Local Property Tax) Act 2012 (as amended) and/or the Finance (Local Property Tax) (Pyrite Exemption) Regulations 2013. If legislative change is required, then I will examine the possibilities for its advance application on an administrative basis with the Revenue Commissioners.
However, pending any decisions in relation to the statutory provisions, the Revenue Commissioners have an obligation to act in accordance with section 10A of the Act, which requires that an LPT exemption can only apply where the residential property has been assessed and a relevant certificate confirming "significant pyritic damage" has issued to the property owner.
287. Deputy Michael McGrath asked the Minister for Finance if he will provide, in tabular form, details of all fees paid to members of the National Asset Management Agency's Northern Ireland advisory board; and if he will make a statement on the matter. [28788/15]
View answerNAMA Board and Committee fees are set out in NAMA's annual reports and financial statements for the relevant reporting period.
Peter Stewart, a former NAMA Board member, was paid €7,641 in 2010 and €7,700 in 2011 for chairing the Northern Ireland Advisory Committee (NIAC). Mr Stewart resigned from the NAMA Board and NIAC in October 2011 and was replaced by NAMA Board Chair Frank Daly. No additional fees are paid to NAMA Board members for serving on the NIAC. Frank Cushnahan resigned from the NIAC on 8th November 2013.
Northern Ireland Advisory Committee fees for each of the years 2010, 2011, 2012, 2013 and 2014 were as follows:
|
|
2010€ |
2011€ |
2012€ |
2013€ |
2014€ |
Total€ |
|
Peter Stewart |
7,641 |
7,700 |
0 |
0 |
0 |
15,341 |
|
Frank Cushnahan |
4,000 |
5,000 |
4,000 |
3,000 |
0 |
16,000 |
|
Brian Rowntree |
4,000 |
5,000 |
4,000 |
4,000 |
2,025 |
19,025 |
|
Total |
15,641 |
17,700 |
8,000 |
7,000 |
2,025 |
50,366 |
288. Deputy Michael McGrath asked the Minister for Finance the total professional fees paid to a firm (details supplied) advising on the sale of the National Asset Management Agency’s Northern Ireland portfolio; if the agency was satisfied with the quality of the advice received; and if he will make a statement on the matter. [28789/15]
View answer289. Deputy Michael McGrath asked the Minister for Finance the total professional fees incurred by the National Asset Management Agency in the course of the sale of its Northern Ireland loan book; and if he will make a statement on the matter. [28790/15]
View answerI propose to take Questions Nos. 288 and 289 together.
I am advised by NAMA that Lazard was engaged by NAMA in January 2014 to assess market interest in, advise on and manage the sale of NAMA's Northern Ireland debtor loan portfolio. I am further advised that the portfolio was sold in April 2014 for an amount in excess of NAMA's reserve sales price, which was set by reference to the net present value of NAMA's projected cashflows from this portfolio over a medium-term horizon. The portfolio was sold following an open competitive sales process involving nine parties which included some of the world's largest investment groups.
I am further advised by NAMA that it incurred loan sale broker fees payable to Lazard of €5.4m, which equates to less than 0.5% of the final sales price on the sale of the Northern Ireland debtor loan portfolio.
Finally I am advised that, inclusive of legal fees and the loan sale broker fee outlined above, NAMA incurred total transaction costs of €9 million, or 0.7% of the final sales price.
290. Deputy Michael McGrath asked the Minister for Finance if he has been informed as to whether corruption claims involving the sale of the National Asset Management Agency's Northern Ireland portfolio are under investigation by the Police Service of Northern Ireland; and if he will make a statement on the matter. [28791/15]
View answer291. Deputy Michael McGrath asked the Minister for Finance if he has been informed as to whether corruption claims involving the sale of the National Asset Management Agency's Northern Ireland portfolio are under investigation by An Garda Síochána; and if he will make a statement on the matter. [28792/15]
View answerI propose to take Questions Nos. 290 and 291 together.
While I am aware of recent reports in the media that law enforcement authorities in Northern Ireland and the UK National Crime Agency are to carry out an investigation into the alleged diversion of professional fees owing to a Northern Ireland law firm by its former managing partner. In a public statement on the matter, Tughans have said: "a former partner diverted to an account of which he was the sole beneficiary, professional fees due to the firm without the knowledge of the partners".
These are extremely concerning allegations and should be investigated.
However, as far as I am aware, the sale of NAMA's Northern Ireland debtor loan portfolio is not subject to investigation by any law enforcement authority and neither I nor NAMA have been contacted by An Garda Síochána, the PSNI nor the UK National Crime Agency regarding these matters.
292. Deputy Michael McGrath asked the Minister for Finance if the National Asset Management Agency was at any stage advised of potential conflicts of interest, involving a person’s work with the agency, and this person's work outside consultancy interests (details supplied); and if he will make a statement on the matter. [28793/15]
View answerI refer the Deputy to the NAMA Chairman's opening address to the Public Accounts Committee (PAC) on 9th July 2015, which is available on the NAMA website at the following link: https://www.nama.ie/about-us/publications/speeches/
The NAMA Chairman advised the PAC that on 20 March 2014, PIMCO, one of a number of bidders for NAMA's Northern Ireland debtor loan portfolio, informed NAMA that its compliance department had discovered that PIMCO's proposed fee arrangement with its legal advisers also included a payment to a former external member of NAMA's Northern Ireland Advisory Committee (NIAC). PIMCO named that individual as Mr Frank Cushnahan. I am further advised that this was the first time NAMA became aware of this matter. Mr Cushnahan was not a member of the NIAC at the time of this disclosure having resigned from that committee in October 2013.
I am advised that the NAMA Board, at a specially convened meeting on 11 March 2014, viewed PIMCO's disclosure as a very serious development. I am further advised that, whilst the former NIAC member was no longer a member of the Committee and never had access to confidential information, the NAMA Board considered that the proposed fee arrangement could undermine the integrity of the sales process. The NAMA Board decided that if PIMCO did not withdraw, NAMA could not permit it to remain in the sales process. This was communicated to PIMCO on 12 March 2014. On 13 March 2014 PIMCO informed NAMA of its decision to withdraw from the sales process. As outlined by the NAMA Chairman at the PAC on 9th July 2015, NAMA were aware that Mr Cushnahan had the use an office in same building as Tughan's.
I am advised that NIAC members were obliged to annually declare any potential conflicts of interest to NAMA in accordance with the Ethics in Public Office Act.
293. Deputy Michael McGrath asked the Minister for Finance if he or officials of his Department have met representatives of a firm (details supplied); the dates of such meetings; and if he will make a statement on the matter. [28794/15]
View answerDepartment of Finance records reflect that, since coming into office, I have met with representatives of the firm in question on 31 March 2014 and 19 March 2015. Officials from my department were also in attendance at these meetings.
In addition to the above meetings, Department of Finance records also indicate that officials from my department met with representatives of the firm in question on 30 May 2011, 1 June 2011 (phone call), 8 June 2011 and 28 March 2015. It is possible this is not an exhaustive list.
In addition, senior officials attend group meetings and conferences arranged by investment banks and stockbrokers as well as presenting at conferences where representatives of the firm in question may have been in attendance.
294. Deputy Michael McGrath asked the Minister for Finance if he or officials of his Department have met representatives of a firm (details supplied); the dates of such meetings; and if he will make a statement on the matter. [28795/15]
View answerDepartment of Finance records reflect that, since coming into office, I had one meeting with the firm in question which took place on 21st February 2013. An official from my department also attended that meeting. It is possible this is not an exhaustive list. The Department's records do not reflect any other meetings with the firm in question.
In addition, senior officials attend group meetings and conferences arranged by investment banks and stockbrokers as well as presenting at conferences where representatives of the firm referenced may have been in attendance.
295. Deputy Willie Penrose asked the Minister for Finance the rationale behind the decisions of the Revenue Commissioners to insist that forms, such as form 12 medical expenses reclaim forms, etc, must now be submitted online, if this decision can be reviewed, in the context that access to broadband and web facilities is not available in many areas; if provision will be made for these forms to be submitted by post and by other methods, as is currently the case; and if he will make a statement on the matter. [28807/15]
View answerI am advised by the Revenue Commissioners that they actively encourage customers to manage their tax affairs online, including the submission of the annual tax return for PAYE (Form 12) and medical expenses claims, as this is the quickest, most secure and most efficient way for customers to do their business with Revenue.
I am aware that Revenue has made a significant investment and is currently making significant improvements to their online service offerings, particularly for PAYE taxpayers, to make it even easier for them to do their business online. This coming September a new application called myaccount is being launched which will provide a single access point and password for all online services for PAYE customers including PAYE Anytime, eForm 12, Local Property Tax (LPT), Home Renovation Incentive (HRI) and MyEnquiries (a secure enquiry facility).
The increasing investment and emphasis on Revenue's online offerings is in line with the Government's Public Service ICT Strategy of digital first to deliver improved efficiencies and better value for money as well as providing more user centred and innovative services for customers.
Revenue fully appreciates that not all customers will be able to conduct their business online and continues to accept returns and claims by post from such customers.
296. Deputy Éamon Ó Cuív asked the Minister for Finance if he will clarify a number of issues in respect of the National Pensions Reserve Fund (details supplied); if he will outline the background to the fund; when it commenced; the percentage basis of the annual contribution; the original long-term purpose of the fund; his plans to handle the pensions time-bomb; the highest level of funding in the fund; when that level was achieved; and if he will make a statement on the matter. [28833/15]
View answerThe National Pensions Reserve Fund (NPRF) was formally established on 2 April 2001 to meet as much as possible of the cost to the Exchequer of social welfare and public service pensions from 2025 to at least 2055. Some €6.515 billion that had been set aside in the Temporary Holding Fund for Superannuation Liabilities in anticipation of the Fund being established was then transferred to the NPRF. The NPRF was never expected to meet the full cost of providing social welfare and public service pensions. The NPRF was a supplementary investment fund intended to support the Exchequer when budgetary pressures increased as a result of mounting pension costs.
Section 18 of the National Pensions Reserve Fund Act 2000 required the payment of a contribution equivalent to 1% of GNP from the Exchequer to the National Pensions Reserve Fund each year. In the period from 2001 to 2009 cumulative contributions to the NPRF from the Exchequer in respect of 1% of GNP amounted to €11.943 billion. Under 2009 legislation, an additional €1.416 billion was paid into the Fund in 2009 to help recapitalise AIB and BoI. In addition, €993 million was received from university and certain non-commercial semi-state pension schemes in 2009 and a further €1,079 million in 2010 under legislation which provided that the pension liabilities of those schemes will be met from the Exchequer. These additional contributions were offset against future Exchequer contributions to the Fund, with the result that no contribution was required in 2011 and a partial contribution would have been required in 2012. However an amendment to the NPRF Act, which was inserted by the Credit Institutions (Stabilisation) Act 2010, empowered the Minister for Finance to suspend the payment of the annual contribution, in 2012 and 2013. Dáil Éireann approved the suspension of Exchequer contributions in 2012 and 2013 on 7 December 2012.
Following the commencement of the relevant section of the NTMA (Amendment) Act 2014 on 22 December 2014 the assets of the NPRF became the assets of the Ireland Strategic Investment Fund (ISIF). At the time of the transition to the ISIF (end 2014) the total value of the NPRF including the Directed portfolio was €22.2 billion. Regardless of opinions on whether or not a restoration of the NPRF is valid it must be noted that under the provisions of the NPRF Act 2000 1% of GNP was payable from the Exchequer to the NPRF each year. This would have meant a payment in the order of €1.6 billion to the NPRF for 2014 requiring compensating fiscal adjustments elsewhere.
While the need for the State to provide for the cost of social welfare and public service pensions has not abated, the Government decided that fostering economic activity and employment through the establishment of the ISIF was the immediate priority. This support for economic activity and employment puts the State in a better position to meet its pension's obligations in the longer-term. In relation to public sector pension costs, the steps this Government has taken in terms of introducing the Single Pensions Scheme will produce significant savings in the longer term. In addition, there is expected to be a significant reduction in public sector pensions following the pay and pension reductions since 2009 and the freeze in pay and pension rates until after the Haddington Road Agreement.
Further information in relation to the performance of the National Pensions Reserve Fund (NPRF) is available in the Fund's published Annual Reports which are available online on the dedicated NPRF website; NPRF.ie.
297. Deputy John Browne asked the Minister for Finance his views that it is justified, morally or otherwise, for Bank of Ireland to continue charging a variable mortgage interest rate of 5.5% on a property which was purchased as a residential investment some years ago, but which has now been re-designated as a principal private residence, due to the bank requiring the sale of a former principal private residence, the debt on which has been repaid in full, including a tracker mortgage; and if he will make a statement on the matter. [28845/15]
View answerAs the Deputy will be aware, 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. Accordingly, it is not appropriate for me to comment on the rate charged by a bank at individual account level.
The Deputy should also note that any consumer has the option to refer their case to the Financial Services Ombudsman for independent review in a situation where they feel they have not been treated fairly by their bank.
298. Deputy John Browne asked the Minister for Finance the reason there is an imbalance in the tax treatment between private rental income and commercial rental income, regarding the different treatment of mortgage interest relief; his plans to provide for equity of treatment under section 97(2) of the Taxes Consolidation Act 1997; his views on the inherent inequality in refusing to provide equity of treatment on the basis of a figure of €80 million to restore mortgage interest deductibility to 100%, in the case of private rental income; and if he will make a statement on the matter. [28846/15]
View answerAs the Deputy is aware, a restriction of 75% on the deductibility of interest in computing taxable rental income from residential property was introduced in the April 2009 supplementary budget in respect of all residential lettings as part of an urgent revenue-raising package aimed at stabilising the public finances.
At the time of its introduction, a similar restriction in respect of rental income from commercial property was also considered. However, it was felt that such a restriction in the commercial sector could have resulted in rents increasing and consideration was given to the fact that many small and medium firms were already facing difficult trading conditions.
As the Deputy will know, all tax reliefs and incentives are subject to regular review as part of the annual Budget and Finance Bill process. Any decisions taken by the Government in this regard are usually announced on Budget Day.
299. Deputy Sandra McLellan asked the Minister for Finance further to Parliamentary Question No. 86 of 5 March 2015, if he will review his original reply, and provide a comprehensive reply, given that the company mentioned is registered as a public limited company, and was granted the licence through his Department, and not as an individual tax payer, and that there is a public interest and concern involved; and if he will make a statement on the matter. [28876/15]
View answerI am advised by the Revenue Commissioners that for reasons of taxpayer confidentiality, which is equally applicable to individuals and incorporated entities, they continue to be unable to provide the details sought by the Deputy.
300. Deputy Pearse Doherty asked the Minister for Finance the number and value of floating bonds held by the Central Bank of Ireland as a result of the liquidation of the Irish Bank Resolution Corporation, the planned disposal schedule originally agreed, and any changes to this schedule; the number and value disposed of to date, and the value of those bonds which have matured. [28881/15]
View answer301. Deputy Pearse Doherty asked the Minister for Finance the interest rates on floating bonds held by the Central Bank of Ireland as a result of the liquidation of the Irish Bank Resolution Corporation; and the interest rates of those sold by the bank to date. [28882/15]
View answerI propose to take Questions Nos. 300 and 301 together.
As part of the liquidation of IBRC in February 2013, the NTMA issued eight Floating Rate Bonds to the Central Bank of Ireland (CBI).
Details of the maturity dates, the nominal amounts issued and the interest margins applying to each of the eight Floating Rate Bonds are outlined in the following table.
|
Floating Rate Bond |
Maturity |
Nominal Amount Issued €m |
Margin % |
|
Floating Rate Treasury Bond 2038 |
18/06/2038 |
2,000 |
2.50 |
|
Floating Rate Treasury Bond 2041 |
18/06/2041 |
2,000 |
2.53 |
|
Floating Rate Treasury Bond 2043 |
18/06/2043 |
2,000 |
2.57 |
|
Floating Rate Treasury Bond 2045 |
18/06/2045 |
3,000 |
2.60 |
|
Floating Rate Treasury Bond 2047 |
18/06/2047 |
3,000 |
2.62 |
|
Floating Rate Treasury Bond 2049 |
18/06/2049 |
3,000 |
2.65 |
|
Floating Rate Treasury Bond 2051 |
18/06/2051 |
5,000 |
2.67 |
|
Floating Rate Treasury Bond 2053 |
18/06/2053 |
5,034 |
2.68 |
Interest is paid semi-annually on the Floating Rate Bonds, on 18 June and 18 December each year. Interest is based on the 6 month Euribor interest rate, plus the individual margins applying to each of the eight bonds.
Interest paid on 18 June 2015 was €348 million and reflected the outstanding balance of €24,534 million at the time of the payment as well as the 6 month Euribor interest rate from mid-December 2014 (0.18 per cent) plus the individual margins. The interest payment in December 2015 will reflect the balance outstanding at that time as well as the 6 month Euribor interest rate from mid-June 2015 (0.05 per cent) plus the individual margins.
The minimum disposal schedule agreed at the time the bonds were issued is outlined below. There have been no changes this minimum disposal schedule. Any deviation from the minimum disposal schedule must take account of financial stability considerations.
- By end-2014: €500 million
- 2015-2018: €500 million per annum
- 2019-2023: €1,000 million per annum
- 2024 onwards: €2,000 million per annum until all of the Floating Rate Bonds have been sold
In December 2014, the NTMA purchased from the CBI and subsequently cancelled €500 million nominal of the Floating Rate Treasury Bond maturing in 2038. In June 2015, the NTMA purchased from the CBI and subsequently cancelled a further €500 million nominal of this same bond.
The residual nominal balance on this 2038 bond has therefore been reduced to €1,000 million and the overall nominal balance across the eight Floating Rate Bonds to €24,034 million.
302. Deputy Pearse Doherty asked the Minister for Finance the value of outstanding European Financial Stability Facility and European Financial Stability Mechanism loans and bilateral loans linked to the bailout payable by the State; the timeframe for their payment; and the interest payable, for each of the next ten years of these loans. [28883/15]
View answerThe outstanding balances on the EFSF, EFSM and bilateral loans and the corresponding maturity profiles, as of end-June 2015, as provided by the NTMA, are outlined in the following table.
|
Year |
EFSF* €m |
EFSM** €m |
Bilateral*** €m |
|
2015 |
|
5,000 |
-86 |
|
2016 |
|
|
-130 |
|
2017 |
|
|
-94 |
|
2018 |
|
3,900 |
|
|
2019 |
|
|
1,949 |
|
2020 |
|
|
2,486 |
|
2021 |
|
3,000 |
817 |
|
2024 |
|
800 |
|
|
2026 |
|
2,000 |
|
|
2027 |
|
1,000 |
|
|
2028 |
|
2,300 |
|
|
2029 |
2,070 |
|
|
|
2030 |
1,900 |
|
|
|
2031 |
4,900 |
|
|
|
2032 |
2,194 |
3,000 |
|
|
2033 |
4,267 |
|
|
|
2034 |
1,480 |
|
|
|
2042 |
1,600 |
1,500 |
|
|
TOTAL O/S BALANCE |
18,411**** |
22,500 |
4,942 |
NOTES
Figures are unaudited and include the effect of currency hedging transactions, where applicable.
Rounding can affect totals.
*EFSF loans reflect the maturity extensions agreed in June 2013.
**EFSM loans are also subject to a seven year extension. It is not expected that Ireland will have to refinance any of its EFSM loans before 2027. However, the revised maturity dates of individual EFSM loans will only be determined as they approach their original maturity dates. The original EFSM maturities are reflected in the table.
***Bilateral loans were provided from the United Kingdom, Sweden and Denmark.
****A prepaid margin of €0.53 billion was deducted from the EFSF loan of €4.19 billion drawdown on 1 February 2011 giving a net liability of €3.66 billion. This margin prepayment will be refunded to Ireland on the maturity of this original loan in 2016. The total net liability of €57.44 billion included in the National Debt (€166.17 billion at end March 2013) takes account of this reduction.
It is not possible to give a definitive schedule of interest payments on these loans for each of the next ten years for a number of reasons, including:
- At end-June 2015, €11.2 billion of Ireland's disbursed EFSF loans are part of a pooled system whereby Programme countries pay the same interest rate. The pooled interest rate is a variable rate which is calculated daily and is based on the EFSF's cost of funds in managing the pool.
- Interest payable on bilateral loans from Sweden and Denmark is also based on a variable interest rate; the 3 month Euribor interest rate.
- The interest rate on EFSM loans is based on the EFSM's cost of funds when it issues bonds to fund the loans. Therefore the interest rate applicable on the rollovers of Ireland's existing loans will only be determined at the time the EFSM issues bonds to fund the maturity extensions.
The fiscal forecasts in the Stability Programme Update of April 2015 covered the period 2015-2020. As part of those fiscal forecasts, projected interest costs on the EFSF, EFSM and Bilateral loans based on estimated EFSF pooled, 3 month Euribor and EFSM rollover interest rates, as provided by the NTMA, were as follows:
|
Year |
Estimated Interest on EFSF/EFSM/Bilateral Loans €bn |
|
2015 |
1.2 |
|
2016 |
1.2 |
|
2017 |
1.1 |
|
2018 |
1.2 |
|
2019 |
1.3 |
|
2020 |
1.2 |
As all of the Bilateral loans will mature before the end of 2021, there will be no interest payable on these loans post 2021.
