Tuesday, 14 Jul 2015

Written Answers Nos. 303-317

NAMA Loan Book Value

Questions (303)

Pearse Doherty

Question:

303. Deputy Pearse Doherty asked the Minister for Finance the par value and purchase value of the remaining loans at the National Asset Management Agency. [28884/15]

Written answers

Minister for Finance

As set out in Note 19 of NAMA's Annual Report and Financial Statements for 2014, which is available on the NAMA website (https://www.nama.ie/about-us/publications/annual-reports/), the carrying value of NAMA's loans at end-2014 was €13.36 billion and the corresponding par/nominal value - that is the amount owed by borrowers - was €55.59 billion.  These figures are also available on a quarterly basis in NAMA's section 55 report and accounts.  The section 55 report for Q1 2015 will be published shortly.

Under IFRS accounting rules NAMA reports on the basis of carrying value, that is, the value of assets on its balance sheet at a given time rather than just the purchase/acquisition price. The carrying value reflects the loan acquisition prices and loan movements since acquisition, less impairment deemed to have occurred subsequent to acquisition.  The disclosure of acquisition price of the residual loan portfolio would not be appropriate as it would be of commercial advantage to prospective acquirers of NAMA assets.

Tax Relief Costs

Questions (304)

Pearse Doherty

Question:

304. Deputy Pearse Doherty asked the Minister for Finance the potential yield from reducing tax relief on private health insurance payments to 0%, and to 10%. [28891/15]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the cost to the Exchequer of tax relief allowed through the Tax Relief at Source system for medical insurance premia for 2014, the most recent year for which data are available, is estimated at €355 million. Tax relief is currently allowed at the standard rate of income tax i.e. 20%.  

The yield to the Exchequer of reducing the tax relief available to 10% and 0% would be of the order of €177 million and €355 million respectively.

Tax Code

Questions (305)

Tony McLoughlin

Question:

305. Deputy Tony McLoughlin asked the Minister for Finance in relation to the current rules involving capital gains taxation on the proceeds from compulsory purchase orders (CPO), if he will consider introducing CPO roll-over relief, similar to the farm fragmentation relief, for farmers who have been subject to a CPO because as it stands a number of farmers from County Sligo who have been subject to a CPO for the proposed N4 national route and who are under 55 years of age are not entitled to any capital gains taxation relief at present, despite the fact that they are selling their land through no choice of their own, and will now be at a loss; and if he will make a statement on the matter. [28892/15]

Written answers

Minister for Finance

When agricultural land is acquired under a compulsory purchase order (CPO), the acquiring authorities usually pay a premium over the agricultural value. The premium may cover the tax due on the disposal and the farmer may well have received the agricultural value of the land in his or her net proceeds after disposals. This means farmers are generally able to buy agricultural land of equivalent value to the land acquired under the CPO.  

The Deputy suggests a rollover relief. General rollover relief was abolished in Budget 2003. One result of rollover relief was that the Capital Gains Tax (CGT) due on an asset disposal was often never paid. While the public finances are improving, it is still the case that the yield from the various taxes, including CGT, needs to be protected.  

In my Budget 2014 speech I announced that an Agri-Taxation Review would be undertaken. The review has been carried out and the report of the Review was published in the context of Budget 2015 in October last year. The Review bore Food Harvest 2020, among other things, in mind. It sets out a strategy for agri-taxation policy for the future and concluded that the three main policy objectives are:

- Increase the mobility and the productive use of land

- Assist succession

- Complement wider agriculture policies and schemes, such as supporting environmental sustainability.

The Review made policy recommendations, taking into consideration the cost of the existing agri-taxation measures that were already in existence and the need to protect the position of the public finances. Many of the recommendations made were introduced by way of the last Budget and Finance Bill process including amendments to income tax land leasing reliefs, CGT Farm Restructuring relief and CGT retirement relief. However, the Review did not recommend change to the tax treatment of land disposed under a CPO.

The Review is available at the following link: http://www.budget.gov.ie/Budgets/2015/Documents/Agritaxation_%20Review%20_Final_web-pub.pdf  

I note the concerns of the Deputy, and of landowners who have been subject to CPO. However, for the reasons outlined, I have no plans to alter the tax treatment of land disposed under CPO.

Property Tax Assessments

Questions (306)

Thomas P. Broughan

Question:

306. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on all methods being used to determine the value of property for local property tax; if these methods include a website (details supplied); and if he will make a statement on the matter. [28933/15]

Written answers

Minister for Finance

I am advised that Local Property Tax (LPT) is a self-assessed tax and it is a matter for property owners to calculate the tax due based on their estimate of the market value of the property on the relevant valuation date, as required by Section 13 of the Finance (Local Property Tax) Act 2012 (as amended).

The current valuation date is 1 May 2013 and any valuation declared on that date is valid until 31 October 2016 (valuation period). The valuation is not affected by any repairs or improvements made to a property or by any general increase or decrease in property prices that might occur over the course of the valuation period.

The compliance programme involves a number of different strands, including monitoring property sales through a clearance system that compares selling prices against valuations declared by the property owner on the Valuation Date. The programme also includes an online facility that allows property owners to upwardly revalue their original Valuation Band having reconsidered their original valuation as too low and pay any outstanding balance. To date over 8,000 property owners have used this facility to put their LPT affairs in order

The final strand of the programme involves monitoring the Register for properties that seem out of line with other comparable properties ('outliers'). To support this element of the programme, Revenue have developed a very sophisticated data analysis reporting tool that compares LPT Returns for properties within a geographic area. The system in effect allows Revenue staff to identify individual properties where the value returned is much lower than the average for its neighbours. LPT information available to Revenue is also linked to publicly available information such as 'Google Maps' and 'Google Instant Streetview', to further assist staff in profiling potentially non-compliant valuations.

As is the case with any tax liability, Revenue may contact the taxpayer for validation of the original valuation. If the property does not produce the required validation or if the information provided does not support the self assessed valuation, then Revenue may assess and revise the liability as appropriate. Any assessment can be appealed by the property owner to the Appeal Commissioners as provided for by Section 59 of the Finance (Local Property Tax) Act 2012 (as amended).

Now that LPT has settled down and is for the most part 'mainstreamed' into normal tax collection operations, Revenue is focusing on compliance activity and on ensuring that all property owners pay the correct amount of LPT. I would urge any property owners that may have significantly under-declared the value of their properties on the 1 May 2013 valuation date to immediately rectify the situation.

Finally, I am aware that Revenue has published very helpful valuation guidance on the LPT portal of its website at www.revenue.ie.

Tax Credits

Questions (307)

Dominic Hannigan

Question:

307. Deputy Dominic Hannigan asked the Minister for Finance if he will consider a tax credit to reduce the cost of child care as part of budget 2016; and if he will make a statement on the matter. [29049/15]

Written answers

Minister for Finance

The Deputy may be aware that the Department of Children and Youth Affairs are currently chairing an Inter-Departmental working group to assess future policy options for increasing the quality, accessibility and affordability of early years and school age care and education services. This group was established in February 2015 and is due to submit a report to Government shortly.  

In relation to schemes under my remit, I have no plans to introduce a tax relief for child care as it could be seen to unfairly discriminate against those individuals who stay at home and look after their children. While wanting to encourage participation in the workforce, equally we cannot say to individuals who stay at home to mind children that they are making a less valuable contribution to society.  

In addition, tax relief is only of benefit to those in the tax net and it is estimated that in 2014, 39% of income earners were exempt from income tax. It could also be argued that any tax relief would most likely be absorbed by child-care providers in the form of higher prices.  

Having said this, I would like to assure the Deputy that the Government acknowledges the continuing cost pressures on parents, particularly those with young children. In recognition of these cost pressures, a number of support measures are in place to ease the burden on working parents. These include the Community Childcare Subvention (CCS) programme, which funds community child-care services to enable them to charge reduced child-care fees to qualifying parents, the Childcare Education and Training Support (CETS) programme which provides free child-care places to qualifying Solas and VEC trainees and the Early Childhood Care and Education (ECCE) programme which provides for a free preschool year for children in the year before commencing primary school. Generous entitlements to paid and unpaid maternity leave as well as child benefit payments are also provided.  

The Department of Social Protection provides financial support to families on low pay by way of the Family Income Supplement (FIS) and additionally to one-parent families through the one-parent family payment.  

Furthermore, a Single Person Child Carer tax credit of €1,650 is available, as well as an additional standard rate band of €4,000. This credit and band is payable to any single person with a child under 18 years of age or over 18 years of age if in full time education or permanently incapacitated. The primary claimant may relinquish this credit and the increase in the rate band to a secondary claimant with whom the child resides for not less than 100 days in the year. To claim the Single Person Child Carer Credit a claimant must not be married, in a civil partnership or cohabiting.  

As the Deputy will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. In considering these, I must be mindful of the public finances and the many demands on the Exchequer given the current budgetary constraints. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.

Mortgage Data

Questions (308)

Michael McGrath

Question:

308. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 253 of 23 June 2015, if he will provide a breakdown, by institution, of the 46,000 mortgages for principal dwelling houses and buy-to-let properties which are held by non-bank lenders; and if he will make a statement on the matter. [29064/15]

Written answers

Minister for Finance

According to the Central Bank's Statistical Release of 4 June 2015, at the end of March 2015, non-bank entities accounted for 5.1 per cent of all outstanding mortgage loans (6.3 per cent in value terms).

The Release noted that non-bank lenders hold almost 46,000 mortgage accounts for principal dwelling houses (PDH) and buy-to-let (BTL) combined. The Central Bank informed me that it does not release  this data  by institution or mortgage type for confidentiality reasons and, accordingly, I do not have a breakdown of this number.

However, in relation to loans held by or sold to unregulated entities, I am glad to inform Deputies that borrowers are now protected by the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 which has just been enacted.

EU-IMF Programme of Support

Questions (309)

Michael McGrath

Question:

309. Deputy Michael McGrath asked the Minister for Finance the current dates at which Greece is due to repay loans to Ireland under the euro area facility agreement; and if he will make a statement on the matter. [29092/15]

Written answers

Minister for Finance

The first capital repayment on the loan to Greece, for €2,998,730.51, is scheduled for 15 June 2020. Thereafter capital repayments of €4,342,989.01 are scheduled to be repaid at three-monthly intervals, the first one scheduled for 15 September 2020 and the last one scheduled for 15 March 2040.  A final payment, of €1,344,258.73, is scheduled for 15 June 2040.

Banking Sector Data

Questions (310)

Michael McGrath

Question:

310. Deputy Michael McGrath asked the Minister for Finance if he will set out the amount of the bank levy paid by each of the three largest payers of the levy in 2015; the name of the institution; and if he will make a statement on the matter. [29093/15]

Written answers

Minister for Finance

Section 72, F (No.2) Act 2013 inserted a new section 126AA into the Stamp Duties Consolidation Act 1999. The section, which  applies to holders of banking licences and building societies in 2011 that were obliged to collect and pay over more than €100,000 DIRT in that year, provides for a levy equal to 35% of the DIRT paid in 2011. The levy applies for a three year period covering the years 2014 to 2016.

The due dates for the submission of a statement showing the assessable amounts and payment of stamp duty by reference to these statements are as follows:

2014: 20th October 2014

2015: 20th October 2015

2016: 20th October 2016

The total amount of the bank levy paid in respect of the year 2014 was €154,394,743.

For reasons of taxpayer confidentiality I am unable to provide details of payments made by individual  financial institutions.

As the due date for payment of the levy for the year 2015 is in October of this year, I am not in a position to provide the Deputy with the yield for 2015. 

Tax Yield

Questions (311)

Michael McGrath

Question:

311. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners have examined the reasons returns from corporation tax were running €600 million ahead of profile in the first six months of 2015; if this is expected to be maintained throughout 2015; and if he will make a statement on the matter. [29094/15]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that they regularly review the reasons for under- or over-performance of receipts across all taxes. On the basis of the evidence available, it would indicate that the over-performance recorded in corporation tax receipts to end-June 2015 is a result of a combination of reasons.  These include improved trading performance across a number of sectors but with particular emphasis on the multinational sector.  In addition there has been a number of one-payments, amounting to approximately €170 million.  

The performance of corporation tax receipts in the first six months of 2015 has been very impressive and welcome. However, while positive preliminary tax payments suggest the outlook for the remainder of 2015 is positive, it is too early to predict whether there will be a similar strong over-performance throughout the second half of the year.  As the Deputy, will appreciate corporation tax receipts are generally skewed towards the second half of the year, with c. 40% of receipts expected in the final two months of the year.  In addition, it is important to point out that there has been significant volatility displayed in the past and a degree of caution should be used when looking at the headline performance.

Consultancy Contracts Expenditure

Questions (312)

Mattie McGrath

Question:

312. Deputy Mattie McGrath asked the Minister for Finance the professional fees bills paid for legal, insolvency and consultancy work relating to entities (details supplied) since 2009; the Central Bank of Ireland's own costs and fees paid; and if he will make a statement on the matter. [29103/15]

Written answers

Minister for Finance

I have been informed by the Central Bank that it is not possible to compile this information in the format sought by the Deputy in the time available. The information will be made available to the Deputy as soon as it is available.

Consultancy Contracts Expenditure

Questions (313)

Mattie McGrath

Question:

313. Deputy Mattie McGrath asked the Minister for Finance if he is aware that the Central Bank does not keep records, by financial entity, of the numbers of receivers, liquidators or examiners appointed each year in the entities it regulates; and if he will make a statement on the matter. [29104/15]

Written answers

Minister for Finance

I am informed by the Central Bank that whilst the Bank would not necessarily have a direct role in relation to the appointments of receivers, liquidators and examiners of regulated financial entities, it is very much cognisant of all such activities as part of its supervisory role in relation to all regulated financial entities.

Tax Code

Questions (314)

Éamon Ó Cuív

Question:

314. Deputy Éamon Ó Cuív asked the Minister for Finance his plans to introduce stamp duty relief on long-term land lease; and if he will make a statement on the matter. [29114/15]

Written answers

Minister for Finance

The Deputy will be aware that one of the recommendations of the Agri-taxation Review intended to encourage more productive use of farmland is that stamp duty relief be given in relation to certain leases of farmland.

Changes to the stamp duty provisions pertaining to farmland leasing provided for in the Finance Act 2014 are however subject to a commencement order pending State Aid approval by the European Commission.

Responsibility for discussions with the Commission in this regard lie with the Department of Agriculture, Food and the Marine.

Pension Provisions

Questions (315, 316)

Catherine Murphy

Question:

315. Deputy Catherine Murphy asked the Minister for Finance the changes which have been made to regulations governing approved minimum retirement funds in the past three years; if he is aware that changes made recently have had the effect of preventing withdrawals from a pension fund above 4% of gross value per year until a beneficiary has reached 75 years of age; the circumstances under which a person may withdraw more than this level in order to address outstanding tax liabilities; and if he will make a statement on the matter. [29164/15]

Clare Daly

Question:

316. Deputy Clare Daly asked the Minister for Finance the basis upon which, from 1 January 2015, only 4% of approved minimum retirement funds can be drawn down. [29168/15]

Written answers

Minister for Finance

I propose to take Questions Nos. 315 and 316 together.

Flexible options at retirement (the so-called ARF option) are available in respect of all benefits from Defined Contribution (DC) retirement benefit schemes and other DC-based pension savings. Choices available to individuals (after taking the tax-free retirement lump sum) include the option to purchase an annuity with the remaining funds, to receive the balance of the pension funds in cash (subject to marginal rate income tax, as appropriate), to invest in an Approved Retirement Fund (ARF) or an Approved Minimum Retirement Fund (AMRF), once certain conditions are met.  

To deal first of all with the changes to access to AMRFs, I should explain by way of background, that under the flexible options at retirement arrangements, where an individual in a DC pension savings arrangement is under age 75 at the time of exercising the option and does not meet the guaranteed pension income requirement of €12,700 per annum, that individual must place a maximum set aside amount of €63,500 (or the remainder of the pension funds if less than €63,500 after taking the retirement lump sum) in an AMRF or purchase an annuity with those funds. 

Any amount of remaining pension funds in excess of €63,500 can be invested in an ARF with access to those funds at the owner's discretion, subject to tax, at the marginal rate.  

The purpose of the AMRF is to ensure that an individual without the minimum guaranteed pension income for life has a pension nest egg to provide for the latter years of his/her retirement. Up to Finance Act 2014, the capital invested in an AMRF could not be accessed, except to purchase an annuity, until the AMRF owner reached age 75 (or meets the guaranteed pension income requirement before then) at which point the AMRF becomes an ARF with unrestricted access to the funds, subject to taxation. While the capital sum in an AMRF could not be accessed, as set out, any income, profits or gains accrued from the investment of the capital could, up to now, be withdrawn by the AMRF owner, subject to tax at the marginal rate.  

I decided to change, from the 2015 tax year, the arrangements for AMRFs so as to allow AMRF owners voluntary, tax-liable access to a maximum of 4% of their AMRF assets each year up to the point at which the AMRF becomes an ARF. This change provides AMRF owners with access to a definitive and certain level of income from their AMRF rather than the uncertain level of income which access to the accrued income, profits and gains in the AMRF provided.  

Under the previous access arrangements for AMRFs, the extent of any income, profit or gains would depend on the performance of the investment options taken and could, therefore, be highly volatile with the possibility of little or no gains accruing in certain years. In addition, the scale of the capital allowed for in an AMRF, at €63,500, would not always permit for investment returns of any significant scale to be made using a prudent investment policy.  

The change allowing access to a specified percentage of the capital in an AMRF is primarily aimed at those individuals whose AMRF constitutes a significant part of their retirement funds and who, while not wishing to purchase a pension annuity with those funds, may require access to a portion of these funds to provide a more certain form of supplementary pension income prior to reaching age 75. This facility also ensures that an individual will have some remaining funds in the AMRF at age 75 to provide for their remaining years, assuming the individual has not purchased a pension annuity in the meantime.  

Individuals whose AMRF represents a less significant part of their retirement funds and whose circumstances would allow for greater investment risk and, therefore, potentially greater investment returns will be limited to the 4% level of asset draw down. However, this draw down will also be available to them for periods when their AMRF investments make losses or returns of less than 4% of the value of their AMRF assets and where, under the previous arrangement, they would not have been able to make a draw down or the draw down would have been of a lesser value than will now be permitted.  

Finally, in this regard, it is open to the owner of an AMRF at any time to use some or all of the capital in an AMRF to purchase a pension annuity.  

As to changes in legislation relating to AMRFs over the past 3 years, there have been a number of changes made in this period relating to the ARF option of which AMRFs form part.  

Budget and Finance Act 2012 increased the annual imputed distribution applying to ARFs from 5% to 6% in respect of ARFs with asset values in excess of €2 million while also extending the imputed distribution arrangements to vested Personal Retirement Savings Accounts (i.e. PRSAs where benefits have commenced.  

Finance Act 2014 reduced the annual imputed distribution rate from 5% to 4% for ARF owners in the age group 60 to 70 years whose ARFs have assets of €2 million or under. This change was introduced in order to reduce the risk that individuals in that age group might outlive the funds in their ARFs.  

In Finance Act 2013, I rescinded the Finance Act 2011 changes to the specified or guaranteed pension income requirement for ARF access which had increased that income requirement from €12,700 to a variable limit based on 1.5 times the State Pension (Contributory) which amounted to €18,000 per annum. At the same time, I also rescinded the Finance Act 2011 change which increased the maximum set aside amount required to be invested in an AMRF from €63,500 of the remaining pension fund (after taking the permissible tax-free lump sum) to a variable amount equal to 10 times the annual State Pension (Contributory) rounded to the nearest €100 which amounted to €119,800 or the remainder of the pension fund if less than this increased amount.  

I re-introduced the original specified income requirement and maximum AMRF set-aside amount on the grounds, among other reasons, that without an appropriate transition period the 2011 Finance Act changes would detrimentally affect the plans of many individuals preparing for retirement over the medium term. The intention at the time of Finance Act 2013 was that the 2011 changes would be re-introduced in 2016. This matter is being examined in the context of the preparations for Finance Bill 2015 taking account of developments since 2013 and the current situation.

Departmental Staff Data

Questions (317)

Seán Fleming

Question:

317. Deputy Sean Fleming asked the Minister for Finance the current average age of permanent staff employed within his Department and the agencies under his Department's remit; the way this varies from the end of 2008 and the end of 2011; and if he will make a statement on the matter. [29197/15]

Written answers

Minister for Finance

I wish to inform the Deputy that the current average age of permanent staff employed within my Department at end June 2015 was 43.6. The average age of staff in 2008 and 2011 is contained in the following table.

Year	Average Age
2008	44.5
2011	44.6
2015	43.6

From 2012 to 2014 the Department has recruited 87 staff with specific high level qualifications and experience. To date in 2015 26 staff have been recruited. Together with the retirement/resignation of 49 staff, this has reduced the average age of current staff to 43.6.

With regard to the agencies under my Department's remit, see the following.

Body	Average Age 2015	Average Age 2011	Average Age 2008
Appeals Commissioners	As the Appeals Commissioner has a small number of permanent members of staff I am unable to provide details of average age for reasons of  staff confidentiality and data protection.
C&AGs	Due to complexity of the information required I am unable to provide this information at present. My staff will forward this information onto the Deputy once it has been received.
Central Bank	Due to complexity of the information required I am unable to provide this information at present. My staff will forward this information onto the Deputy once it has been received.
Credit Review Office	As the CRO has a small number of permanent members of staff I am unable to provide details of average age for reasons of  staff confidentiality and data protection.
CUAC	CUAC does not engage any permanent staff
Credit Union Restructuring Board (ReBo)	ReBo does not engage any permanent staff
Disabled Drivers Medical Board of Appeals	The staff engaged at the Medical Board of Appeal work for the National Rehabilitation Hospital
Financial Services Ombudsman	37 years of age	40 years of age	41 years of age
Irish Fiscal Advisory Council	As the IFAC has a small number of permanent members of staff I am unable to provide details of average age for reasons of  staff confidentiality and data protection.
Investor Compensation Company Limited	Staff  seconded from the CB and will be included in the reply for the Central Bank
Irish Bank Resolution Company	N/A In Special Liquidation
Irish Financial Services Appeals Tribunal	As the IFSAT has a small number of permanent members of staff I am unable to provide details of average age for reasons of  staff confidentiality and data protection.
National Treasury Management Agency, National Asset Management Agency, Strategic Banking Corporation of Ireland	Due to complexity of the information required I am unable to provide this information at present. My staff will forward this information onto the Deputy once it has been received.
Office of the Revenue Commissioners	47.5 years of age	46.4 years of age	44.7 years of age
Social Finance Foundation	As the SFF has a small number of permanent members of staff I am unable to provide details of average age for reasons of staff confidentiality and data protection.