Written Answers Nos. 71-80
71. Deputy Michael McGrath asked the Minister for Finance the number of first-time buyers who have received a refund of deposit interest retention tax paid in the previous 48 months; when the scheme will conclude; and if he will make a statement on the matter. [12283/16]
View answerThis scheme provides that first-time buyers who purchase or self-build a residential property between 14 October 2014 and 31 December 2017 may be entitled to claim a refund of DIRT which was deducted from interest earned on savings used for the purchase of the property in the 48 months prior to the purchase date or completion date if a self-build.
The relief is confined to DIRT paid on savings up to a maximum of 20% of the purchase price, or in the case of self-builds, 20% of the completion value of the property and the property must be used by the first time buyers as their home.
I am advised by Revenue that since 14 October 2014, when the scheme was introduced, to date, a total of €326,888 has been refunded to 335 applicants.
72. Deputy Martin Heydon asked the Minister for Finance his plans to introduce incentives for first-time buyers who are trying to purchase their first home; and if he will make a statement on the matter. [12296/16]
View answerThe Programme for Partnership in Government makes reference to a "temporary targeted reduction of the rate of VAT from 13.5% to 9% on new, affordable houses and apartments, both public and private, timed to generate the maximum impact on supply and to target principally the purchasers of affordable homes".
However, I understand that such a VAT amendment would be very complicated to implement and may not deliver the relief to the purchaser, but instead would be absorbed by the builder. As the proposal is aimed at targeting the affordability of homes from the position of the purchasers, I do not believe such a VAT amendment would be of assistance.
As an alternative, and as I stated at the Oireachtas Committee on Housing recently, I have asked my Department to examine an approach through the income tax system, perhaps similar to the Home Renovation Incentive (HRI), in which a relief could be provided to home purchasers.
My officials are actively considering options for such an incentive and will set out possible parameters for its scope for my consideration in the near future.
Some of the issues that will need to be considered include the purchase price thresholds that could apply, the income level thresholds that might apply and the time span for which such an incentive might be available.
73. Deputy Ruth Coppinger asked the Minister for Finance to review the investment of the strategic investment fund in fossil fuels and other industries that have a harmful impact on climate change and the environment; and if he will make a statement on the matter. [12298/16]
View answerThe first investment strategy of the Ireland Strategic Investment Fund (the Fund) was published in July 2015. The strategy states that "energy (allocation) will include a significant element of renewables investment". The Fund also commits to operating to high international standards, investing in line with both the Principles for Responsible Investment (PRI), which focus on the management of environmental, social and governance factors to improve sustainability of investment returns, and the Santiago Principles, which are the globally accepted best practice principles for sovereign investment funds such as ISIF.
The Fund's current investment holdings in fossil fuel companies are among the legacy global investments from its predecessor the National Pensions Reserve Fund (NPRF). These are being gradually sold over a period of years to finance investments in Ireland, as they materialise. To date, any exclusions from the Fund on the basis of ethical considerations are those mandated by legislation. In this regard the only relevant legislation impacting on the Fund's investments is the Cluster Munitions and Anti-Personnel Mines Act 2008.
The ISIF has a close working relationship with the Department of Communications, Climate Change & Natural Resources and I am informed by the NTMA that it will continue to seek out further investments for the Fund that are consistent with its mandate and are aligned with national decarbonisation and energy security objectives and with broader energy Government policy.
The National Treasury Management Agency (Amendment) Act 2014 which established the ISIF on a statutory basis provides that the Fund shall review its investment strategy after 18 months of operation and that in reviewing its investment strategy shall consult with the Minister for Finance and the Minister for Public Expenditure and Reform, and that the Minister for Finance may consult with other Government Ministers, as appropriate. This review will be conducted in the second half of 2016 and, as this is not for some time yet, the exact details have yet to be considered fully.
74. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding levies added to car insurance; and if he will make a statement on the matter. [12319/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. The ability of the Government to influence insurance pricing is limited as insurance companies are required under European law to price in accordance with risk and neither I, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing or the provision of insurance products.
Insurance companies consider a number of risks when determining the premium for a proposed insurance policy and premium will take account of the actuarial calculation of risk. Insurance Ireland has informed me that motor insurers, in making decisions on whether to offer cover and what terms to apply, use a combination of rating factors such as the age of the driver, the type of car, claims record, driving experience, number of drivers, how the car is used, etc. Insurers do not all use the same combination of rating factors, prices vary across the market, and consumers are free to choose.
Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. In the event that a person is unable to obtain a quotation for motor insurance or feels that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance, they should contact Insurance Ireland, 5 Harbourmaster Place, IFSC, Dublin 1, Telephone +353 1 6761820 quoting the Declined Cases Agreement.
75. Deputy Fergus O'Dowd asked the Minister for Finance the position for retired PAYE workers who are recipients of a small foreign pension marginally in excess of €3,000 and who would prefer to opt for a PAYE tax assessment but are subject to self-assessment, if he will increase the limit for PAYE assessment for such persons to €4,000; and if he will make a statement on the matter. [12387/16]
View answerI am advised by the Revenue Commissioners that, in general, taxpayers who are "chargeable persons" under the self-assessment system (for example, individuals who carry on a trade, or have non-PAYE income such as investment income or foreign pensions) are required to submit a tax return and self-assessment to Revenue by 31 October of the year following the tax year in question (or by mid-November, if paying and filing through the Revenue On-Line Service).
However, under section 959B of the Taxes Consolidation Act 1997, a taxpayer who has income taxed under the PAYE system (such as a salary or a private pension) and who also has taxable non-PAYE income which does not exceed the income limit provided for in section 959B may request Revenue to reduce their annual PAYE tax credits and rate band entitlements, so that the tax on their non-PAYE income is deducted by their employer or pension provider rather than by way of an annual assessment.
The annual income limit was set at €3,174 for the tax years to 2015 inclusive. However, I increased the limit to €5,000 with effect from the tax year 2016 in Finance Act 2015. The increased limit should reduce the number of taxpayers with low levels of non-PAYE income who are required to submit annual tax returns for 2016 and subsequent years.
76. Deputy Joe Carey asked the Minister for Finance to facilitate mortgage holders in switching lenders with greater ease; and if he will make a statement on the matter. [12434/16]
View answerThe Programme for a Partnership Government provides that "We will take all necessary action to tackle high variable interest rates; including through establishing a new code of conduct for switching mortgage provider, administered by the Central Bank and the development of a new, easy-to-use standardised and dedicated switching form."
A Central Bank Economic Letter published last July suggested that 21% of existing PDH variable rate mortgage customers could save by switching their provider. In the present environment, where we are seeing lenders reduce rates and introduce offers specifically targeted at the switcher market, I have encouraged borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory.
In this regard, the Competition and Consumer Protection Commission (CCPC) website, www.consumerhelp.ie, is a valuable source of information on the rates charged by various financial institutions. In addition, the CCPC have a mortgage switching tool on their website which should allow borrowers compare rates charged across institutions.
My officials will work with the Central Bank on the establishment of the new code of conduct for switching mortgage provider and to develop the dedicated switching form.
77. Deputy Willie Penrose asked the Minister for Finance the steps he will take to communicate with the Revenue Commissioners to ensure that a person (details supplied) whose house was under construction in 2014 and which has been completed and is fit for habitation is not subject to the local property tax until 2017, which is in accordance with the correspondence furnished upon inquiry in February 2014 by the Revenue Commissioners; and if he will make a statement on the matter. [12436/16]
View answerI am advised by Revenue that the property in question is exempt from Local Property Tax (LPT) until 31 October 2019. The verification check undertaken by Revenue arose on foot of the person in question selecting the incorrect exemption code. On foot of Revenue's check, the person's record was revised to reflect the correct exemption code and the matter was fully resolved.
78. Deputy Pearse Doherty asked the Minister for Finance why he has not acted on information his Department received from a whistleblower regarding the abuse of the dwelling house exemption by high wealth persons as a means of avoiding capital acquisitions tax; the details of anti-avoidance measures and the caps on relief he has considered to stop this supposed abuse; the number of persons who have availed of this exemption and the amount of capital acquisitions tax exempted in each of the years 2006 to 2015 in tabular form. [12447/16]
View answerThe dwelling house exemption is a provision of the capital acquisitions tax (CAT) legislation. It allows for the tax-free transfer by way of gift or inheritance of the residential property in which a beneficiary lives, subject to certain conditions. These conditions include a requirement that the beneficiary has been living in the property for three years prior to receiving it and that they remain living in the property for six years afterwards, except in certain special circumstances. It is also a condition of the relief that the beneficiary not be beneficially entitled to any other residential property at the time of the transfer.
The underlying purpose of the relief, which I consider to be reasonable, is to prevent so far as possible cases of hardship arising from a tax perspective when a person is gifted or inherits what is, in effect, their home. My Department and the Revenue Commissioners have encountered some evidence that individuals may be using the relief as a way of passing on wealth tax-free in a manner which is not in line with the core aim of the relief. This evidence has come from several sources, including information provided by an individual who claimed to have encountered the practice in a professional capacity.
My Department and the Revenue Commissioners are currently working to gather and assess information relating to such possible practices and to consider whether the current scope of the relief is in line with its original spirit. The Deputy's attention may have been drawn to this subject by media reports following the release by my Department of material relating to the issue in response to a freedom of information request submitted by a journalist. As is clear from the material released in response to that request, the work of investigating this issue and developing potential policy responses is current and ongoing.
I am advised by the Revenue Commissioners that the available information in respect of dwelling house exemption from capital acquisitions tax is as shown in the table. The estimated cost for the Dwelling House exemption does not take account of the availability or otherwise of the relevant tax-free thresholds if the exemption did not apply.
|
Year |
Numbers |
Cost €m |
|
2008 |
460 |
43 |
|
2009 |
574 |
36 |
|
2010 |
440 |
26 |
|
2011 |
565 |
45 |
|
2012 |
499 |
38 |
|
2013 |
538 |
35 |
|
2014 |
614 |
41 |
|
2015 |
741 |
52 |
80. Deputy Bernard J. Durkan asked the Minister for Finance how a person (details supplied) can best access savings accrued under the approved minimum retirement fund scheme; and if he will make a statement on the matter. [12455/16]
View answerBefore Finance Act 1999 people with defined contribution pension savings had no option but to buy a pension income (called an annuity) with their savings after taking the allowable tax-free retirement lump sum. Changes since then have given people more choices for what to do with their pension savings. This is called the flexible options at retirement regime. These choices include taking a cash payment, subject to income tax, investing in an approved retirement fund (ARF) or investing in an approved minimum retirement fund (AMRF).
Until he or she is 75, a person can only take the whole amount of their savings as cash or put it in an ARF if he or she has a guaranteed pension income of €12,700 or more. If these conditions are not met then he or she can buy an annuity or put a certain amount of the funds, called the "set aside" amount into an AMRF. The maximum "set-aside" is €63,500 or the remaining value of the pension funds, after taking the tax-free retirement lump sum, if less than €63,500. These requirements have been in place since the introduction of the flexible options at retirement regime and are therefore of long standing.
The funds in an AMRF can be used at any time, in full or in part, to buy an annuity. This includes the option to buy an annuity which is large enough to give the owner a guaranteed income of €12,700. If the owner does this he or she will then have access to the rest of the funds, as their AMRF then converts into and ARF with discretionary access to the funds, subject to tax at their marginal rate.
The purpose of the AMRF is to ensure that a person without the minimum guaranteed pension income for life has a pension "safety net" to provide for the latter years of his or her retirement. However, every year to age 75, the owner of an AMRF can access 4% of the funds in the AMRF.
If an individual meets the requirements to be able to access the full amount of the funds in an AMRF and chooses to do so then it is taxable in the hands of the recipient as income for the tax year in which it is paid.
