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Tax Yield

Dáil Éireann Debate, Tuesday - 5 October 2021

Tuesday, 5 October 2021

Questions (169)

Pearse Doherty

Question:

169. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 446 of 27 July 2021, if the revenue generated from the introduction of a 40% rate of capital gains tax on the disposal of assets made by persons in cases in which the gains accrued are in excess of individual incomes, including incomes generated by gains in excess of €200,000, €300,000, €400,000 and €500,000, was calculated on the basis of the farm restructuring relief, revised entrepreneur relief and the retirement relief applying to the income and capital gains tax returns for the tax year 2018 before the 40% rate applied; and if not, what the revenue generated would amount to in those circumstances in which the aforementioned reliefs were considered before the proposed 40% rate was applied on the respective thresholds. [47664/21]

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Written answers (Question to Finance)

I am advised by Revenue that the estimates provided in my response to Parliamentary Question No. 446 were on the basis of net taxable gains returned and therefore after the impact of farm restructuring relief and retirement relief. They did not include any potential additional yield from increasing the rate for individuals claiming entrepreneur relief from 10% to 40%.

As information on the amount of retirement relief is not required on tax returns, it is not possible to provide an estimate of the potential yield from imposing a tax rate of 40% on any gains excluded by the application of this relief.

Due to the low number of individuals claiming farm restructuring relief for 2018 and Revenue’s obligation to preserve the confidentiality of taxpayers’ data, it is not possible to provide the estimated yield for imposing a tax rate of 40% on gains excluded by this relief broken down by income range.

In respect of entrepreneur relief, the additional yield from increasing the rate to 40% on gains where both the income and the gain of the individual exceed the relevant thresholds is as shown in the table below. These estimates are on the basis of tax returns for the year 2018, the latest year available, and do not include the impact of behavioural change nor do they take account of other reliefs that might potentially be availed of due to the limitation of entrepreneur relief.

Gross Income and Entrepreneur Relief Gain Limit

Additional Estimated Gain €m

€200,000

28

€300,000

12

€400,000

7

€500,000

4

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