Written Answers Nos. 94-103
94. Deputy James Lawless asked the Minister for Finance if he will consider siting another vehicle registration tax registration centre in north Kildare in view of the demand from large population towns such as Leixlip, Celbridge and Maynooth and that the closest centre currently within the county is at Naas; and if he will make a statement on the matter. [35396/16]
View answerI am informed by Revenue that an increase in the volume of applications to the NCT for vehicle registrations has resulted recently in some increase in waiting times.
In response, by the end of November, nine additional staff will be available for VRT work in a number of NCTS Centres nationally. A VRT function is being added to the Deansgrange NCTS Centre this month to allow for more capacity to assist in the greater Dublin/Kildare area. Also, Applus, the NCT service provider, is sourcing a location in the south Dublin area that will be opened as a dedicated VRT centre. In combination, Revenue believes that these actions will considerably alleviate the problem.
For authorised dealers in the Kildare area there are also two mobile units which operate from Dublin and one mobile unit which operates from Carlow. These are in place to assist dealers to get vehicles pre-inspected at their premises. For more information please refer to the Revenue website: http://www.revenue.ie/en/tax/vrt/pre-registration-inspections-faqs.html.
Revenue continues to monitor the level of service being provided by the service provider, Applus, and is satisfied that the service currently provided, while stretched at times, is a reasonable service overall and that customers are normally able to make a suitable appointment. Should the on-going demand for VRT registration services continue to increase, consideration will be given to further expansion of the service.
95. Deputy Margaret Murphy O'Mahony asked the Minister for Finance if he has considered the introduction of a formal ethical investment policy for the taxpayer funds that are currently invested as part of the Ireland Strategic Investment Fund, managed through the National Treasury Management Agency; his views on the appropriateness of holding investment in tobacco companies as part of this fund (details supplied); and if he will make a statement on the matter. [35275/16]
View answerThe Ireland Strategic Investment Fund (ISIF) currently operates a Sustainability and Responsible Investment Policy, which is published on ISIF's website. In addition, the Fund operates to high international standards and invests in line with both the UN-sponsored Principles for Responsible Investment (PRI) and the Santiago Principles, which are the globally accepted best practice principles for sovereign investment funds such as ISIF.
ISIF commits to reviewing all of its investments for exposures to sectors and/or companies with potentially controversial business exposures and associated reputational risks. Historically, exclusion has not been part of ISIF's Responsible Investment strategy with the only exclusions from the Fund being mandated by legislation. To date, the Cluster Munitions and Anti-Personnel Mines Act (2008) is the only relevant legislation and the ISIF operates a prohibited securities list of 19 companies on this basis.
I am informed by ISIF that its senior management and the NTMA Board's Investment Committee agreed to review the current Sustainability and Responsible Investment Policy to examine the potential of adding to the list of excluded investment categories. This process is currently underway and is expected to be completed by the end of the first quarter of 2017.
In relation to investment in tobacco companies, I am informed by the ISIF that on the basis of preliminary and unaudited figures for end Quarter 3 2016 i.e. as at 30th September 2016 ISIF had equity holdings in three tobacco companies with a value of €1.5m or 0.02 per cent of its total assets. Such investments should be considered in the context of ISIF's broader portfolio and the Fund's commitment to responsible investment.
The wider review of ISIF's investment strategy, due to take place 18 months after the establishment of the ISIF, will include an appraisal of the success of ISIF's mandate to date. Work on the review has commenced and is due to be completed by end-2016.
In light of all of the foregoing I am satisfied with the approach adopted by ISIF to date in implementing its agreed investment strategy while taking into account international best practice. Both the NTMA and Government are mindful of the fact that public attitudes and policy are not fixed and can evolve. The ongoing review of exclusions by the NTMA and the wider review of ISIF's investment strategy are opportunities to fine tune the approach in the light of relevant developments both nationally and internationally.
96. Deputy Tony McLoughlin asked the Minister for Finance if consideration will be given in future finance Bills which would enable the capital gains tax 33% to be lowered for certain legal separation cases when the sale of a divorcing couple's shared property will have to be used to provide new accommodation for a family member with a disability; and if he will make a statement on the matter. [35278/16]
View answerI am advised by Revenue that a capital gains tax (CGT) relief applies in respect of a gain made by a couple who are legally separating on the disposal of their family home together with land occupied as its gardens or grounds up to an area (exclusive of the site of the residence) of one acre. For full relief to apply, the house must have been occupied by the individuals as their family home throughout the period during which they owned the property. Where the house was not so occupied during the whole period of ownership, only the proportion of the gain applicable to the period of occupation is exempt from CGT.
However, the exemption would continue to apply in circumstances where, after the legal separation, the house is occupied by one of the parties as his or her principal private residence.
In any event, the last 12 months of the period of ownership is treated as a period of occupation for the purposes of the relief.
Relief is also available in respect of a gain arising on the disposal of a house or part of a house which, during the period of ownership, was the sole residence of a dependent relative. A dependent relative means a relative of the individual who is incapacitated by old age or infirmity from maintaining himself or herself. For the relief to apply, the house must have been provided rent-free for the dependent relative.
Gains arising in respect of other jointly owned property such as, for example, a property which was held by a divorcing or separating couple as an investment are liable to CGT at the rate of 33%. The first €1,270 of a gain accruing to an individual in a tax year is exempt from CGT.
I do not propose to introduce a relief from disposals of property other than the owners' home in the circumstances outlined by the Deputy. The situation described is very specific and to introduce a relief for it would mean moving towards a situation where tax policy is designed not on general principles of equity and efficiency but for the benefit of specific individuals.
97. Deputy Robert Troy asked the Minister for Finance the reason a person (details supplied) does not qualify for inheritance tax. [35289/16]
View answerIt is assumed that this question concerns the eligibility of the person concerned for Favourite Nephew Relief. Favourite Nephew Relief is provided for in the Capital Acquisitions Tax Consolidation Act 2003 (Schedule 2, Part 1, Paragraph 7). This relief applies to a niece or nephew who has worked substantially on a full-time basis for the disponer for the period of five years ending on the date the disponer ceases to have a beneficial interest in the business, including farming. The relief only applies to assets used in connection with the business.
To qualify for the relief, the beneficiary must have worked a minimum number of hours in the disponer's business, i.e.
- 15 hours per week in a small business, i.e. a business carried on exclusively by the disponer, the disponer's spouse or civil partner and the nephew/niece.
- 24 hours per week in a larger business, i.e. where there are other employees.
I am advised by Revenue that a Capital Acquisition Tax Return (IT38) was made on 1 November 2016. No claim to relief was made, either by the person himself or his agent. The "Additional Information" provided by the agent in the case is not sufficient to make a definitive determination on eligibility for Favourite Nephew Relief. If the person concerned or his agent considers that Favourite Nephew Relief applies, the supporting information should be forwarded to Revenue's BMW Region at the CAT Centralised Office, Government Offices, Millennium Centre, Dundalk, Co Louth.
98. Deputy Niamh Smyth asked the Minister for Finance the measures that have been taken to meet and engage with insurance companies here regarding excessive premiums being charged to consumers, particularly in counties Cavan and Monaghan. [35315/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks that they are willing to accept. This inability to intervene in such matters is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.
However, I do accept that it is possible for the State to play a role in helping to stabilise the market. Consequently, I established the Cost of Insurance Working Group and appointed Minister of State Eoghan Murphy as Chair. The initial focus of the Working Group is on the factors that are contributing to the cost and availability of motor insurance and identifying what short-term, medium-term and long-term measures can be introduced to help consumers and businesses. A broad range of issues affecting the cost and availability of motor insurance are being examined by the Working Group.
The Cost of Insurance Working Group has met ten times to date and will continue to meet until the end of the year. The work is being progressed through four subgroups. These subgroups have been meeting on a weekly basis since their establishment on 1st September 2016.
The Working Group and the four subgroups have engaged in a consultation process and has met with and heard from a variety of relevant stakeholders including: Insurance Ireland, the Irish Brokers Association, AA Ireland, Auto Records Limited, the Consumers Association of Ireland, the Law Society, the Bar Council, Irish Road Haulage Association, the Car Rental Council, the Freight Transport Association of Ireland, the National Transport Authority, the Motor Insurers' Bureau of Ireland and Tiomanai Tacsai na hEireann.
In addition, the Working Group has engaged with relevant insurance companies as part of this consultation process. The views and submissions of insurance companies, and all those from interested parties, are being considered as part of the ongoing work of the Working Group.
The Working Group provided me with an initial set of emerging recommendations at the end of October 2016. Since then, the Working Group has been working to finalise their Report and to develop an action plan to enable the relevant Government Departments and Offices to commence the implementation of agreed priority actions. The report and action plan will detail any legislative or regulatory changes that may be required and will include a detailed timeline for implementation.
From the emerging recommendations presented and the consultations carried out since, it is likely that the report will address nine key areas, with in the region of 40 recommendations in total.
99. Deputy John Deasy asked the Minister for Finance the amount of money the State Claims Agency has paid out in claims brought against State and public authorities in each of the past three years. [35330/16]
View answerAs the Deputy will be aware, the NTMA is designated as the State Claims Agency (SCA) when performing the claims management and risk management functions designated to it under the National Treasury Management Agency Act 1990, as amended.
In answer to the Deputy's question, I refer to the material provided by the SCA and which is outlined in the following table. The material provided by the State Claims Agency covers the amounts paid during the period 2013 to 2015, and the report is correct as of 11/11/2016.
This information has been extracted from the National Incident Management System, launched by the SCA in June 2014 as a confidential and secure end-to-end risk management tool that allows enterprises to manage incidents throughout the life cycle. The information included reflects payments for both resolving and managing active claims, and it includes the total amount paid per year across all Delegate State Authorities and Healthcare Enterprises (excluding Private Healthcare Schemes and Property Damage recovery claims). It should be noted that the amount paid reflects payments made in a given year, and these payments include legal fees, damages and other expert costs.
Table 1: Total amount paid per year*
|
Transaction Year |
2013 |
2014 |
2015 |
Grand Total |
|
Amount Paid |
€137,402,681 |
€130,552,841 |
€222,763,493** |
€490,719,015 |
* Attention is drawn to the fact that the SCA amended its reporting methodology, at end of Q1 2016, to now recognise transactions on payment date as opposed to transaction date. This adjustment relates to figures for 2014 and 2015 only.
** The notable increase between 2014 and 2015 is due to the following factors:- the SCA's expanded remit with a number of new delegated State Authorities, the maturing of the claims portfolio, catastrophic claims reverting from Periodic Payment Orders (PPO) to lump sum settlements and the outcome of two specific cases during 2015.
100. Deputy John Deasy asked the Minister for Finance the amount of funding allocated by the Strategic Banking Corporation of Ireland to small and medium-sized enterprises in County Waterford to date; the total number of applications approved nationally; and the amount of funding involved since its launch. [35331/16]
View answerAs the Deputy will be aware, the Government is committed to supporting the financing needs of SMEs in all regions of the country and ensuring that there is an adequate supply of affordable and appropriate credit to meet their needs. In this regard, the Strategic Banking Corporation of Ireland (SBCI) is a key initiative that was developed in order to increase the availability of low cost, flexible finance to SMEs.
The SBCI publishes lending figures twice a year and these are available on its website: www.sbci.gov.ie. To the end of June 2016, the SBCI has lent €347 million to 8,619 SMES. More than 80% of loans were for investment purposes and the average loan size is approximately €40,000. The SMEs who received SBCI finance are from a variety of business and economic sectors and are spread across every region of the country. It is encouraging to note that 85% of SMEs supported by the SBCI are based outside Dublin. The SBCI breaks downs its lending on a regional basis. The proportion of SBCI loans made to SMEs in the South East Region, which includes County Waterford, is 10.9%. The SBCI continues to make significant funding available to SMEs across Ireland who are seeking finance to invest in and grow their businesses.
101. Deputy Danny Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding banks; and if he will make a statement on the matter. [35417/16]
View answerAs the Deputy will be aware, operational and strategic management issues in the Irish banks are solely a matter for the board and management of the relevant institution within the constraints imposed by their regulator, the Central Bank, and the law as it applies. Notwithstanding the fact that the State has a significant shareholding in a number of institutions, I have no function in their day-to-day activities. The Relationship Framework Agreements define the arm's length nature of the relationship between the State and the banks in which the State has an investment; the relationship framework agreement for each institution can be accessed below.
AIB: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf
Bank of Ireland: http://finance.gov.ie/sites/default/files/Bank-of-Ireland1.pdf
Permanent TSB: http://www.finance.gov.ie/sites/default/files/Relationship%20Frameworks%20for%20the%20Irish%20Banks%20Irish%20Life%20and%20Permanent.pdf
102. Deputy Pearse Doherty asked the Minister for Finance regarding the recent strong rise in bond yields, a key measure of long-term interest rate expectations, if he has assessed the potential cost of rising interest rates on our national debt and economic growth over the coming years; and if he will make a statement on the matter. [35425/16]
View answerMy Department and the National Treasury Management Agency (NTMA) are monitoring, on an ongoing basis, bond market developments. Government bond yields in general including for Ireland have risen in recent weeks and particularly so in recent days. It remains to be seen whether this is a temporary re-pricing or the beginning of a more sustained rise in yields generally.
While the recent increase in government bond yields has no immediate impact on our debt servicing costs, a sustained rise could negatively impact the cost of servicing the National Debt over the coming years.
I am aware of the sensitivity of the economy to changes in interest rates. Indeed, the Risk and Sensitivity Analysis chapter in Ireland's Stability Programme April 2016 Update (SPU) included an illustrative assessment of the impact of a 1 percentage point (pp) increase in interest rates (SPU page 27).
It is important to note that interest rates are influenced by a number of factors including inter alia inflationary expectations, exchange rate developments, saving patterns of firms and households and risk premia. The precise impact of rising interest rates on economic growth will depend on which factors are driving the increase and whether the increase is likely to persist.
The NTMA completed its final bond auction of 2016 on 3 November. That auction received bids of 2.6 times the €750m being auctioned, demonstrating that investor interest was very strong. This represented Ireland's continuing growth and demonstrates confidence in Ireland among the global markets. With the completion of that auction the NTMA has issued €8.25 billion nominal from its stated target range of €6 to €10 billion in the bond markets this year, at a weighted average yield of 0.82 per cent.
The NTMA's debt issuances earlier in the year, a time when Irish Sovereign borrowing yields were at close to record lows, have allowed it to lock in longer maturities at low interest rates, which is positive for debt servicing costs and will be important when interest rates return to normal.
It is important to bear in mind that Ireland's fundamental debt dynamics are improving and debt servicing costs are declining. These improved fundamentals mean that Ireland has now regained its A-rating with all the major credit rating agencies, following Moody's upgrade earlier this year.
The Exchequer is in a healthy funding position at present. It had €9 billion in cash and other liquid short-term investment balances available to it at end-October and it has limited financing needs in the months ahead. My Department forecasts a 2017 Exchequer Borrowing Requirement (EBR) of €2.2 billion. The next Treasury Bond maturity is not until October 2017.
Looking towards 2017 the NTMA has advised me that next month they will announce their 2017 funding plan which will include a planned bond issuance range.
103. Deputy Pearse Doherty asked the Minister for Finance if he has conducted a risk assessment on the potential for a decrease in our corporate tax receipts in view of potential changes to the United States tax code; and if he will make a statement on the matter. [35426/16]
View answerMy department continually monitors potential international tax changes that may have an impact on Ireland. No risk assessment has been carried out into the impact of potential changes to the US tax code. The impact of any US tax reform on Ireland will clearly depend on the exact nature of the reform. Any reforms are likely to be complex and involve broader measures than simply reducing rates. Regardless of the corporate tax rate applied by the US, Ireland's tax offering and Ireland generally will remain very attractive for US and other multinationals. US companies will always need a base of operations in Europe and Ireland continues to be a very attractive place to invest.
