Dáil Éireann díospóireacht -
Thursday, 6 Dec 2001

Vol. 546 No. 1

Written Answers. - Tax Consolidation Act.

Enda Kenny

Ceist:

92 Mr. Kenny asked the Minister for Finance if, in respect of section 598 of the Tax Consolidation Act, 1997, he will confirm that qualifying assets are defined as assets but not shares or investments used in the trade, profession or employments carried on by the individual and the individual's family company; if he will provide an example of the assets which may be included in the Act; if it includes land and buildings owned by the individual but used solely in the trade carried on by the person's family company; if his attention has been drawn to the fact that the interpretation by the Revenue Commissioners of the relief involved has effectively stymied the transfer of numerous family businesses; and if he will make a statement on the matter. [31249/01]

Minister for Finance (Mr. McCreevy)

This question is similar to those raised by Deputy Kenny in Questions Nos. 59 and 60 to which I replied on Thursday, 8 November 2001. In my reply I set out how the relief afforded by sections 598 and 599 of the Taxes Consolidation Act, 1997, operated and I explained what type of assets were covered – and not covered – by the relevant provisions in determining capital gains tax retirement relief.

Moreover, I am informed by the Revenue Commissioners that their interpretation of the issue raised in the question has been consistent since the sections were introduced in their original form in the Capital Gains Tax Act, 1975. Their interpretation is that assets held outside a family company are considered "investments" and are not, therefore, qualifying assets for the purposes of the relief. To the best of their knowledge, this interpretation has never been challenged through the normal appeal mechanism provided for in the Taxes Consolidation Act, 1997.

I am not aware that the "transfer of numerous family businesses" has been, thereby, "effectively stymied". The Deputy will be aware that in my budget in December 1997 I halved the rate of capital gains tax from 40% to 20%, a move that has considerably eased the tax burden where it arises on transfer of property.