This is a very complex technical matter and we are fortunate in having Senator Alexis FitzGerald on the Committee in this regard because his knowledge of these matters is comprehensive. He has been very helpful to the sub-committee in the preparation of this draft report which is before us. He has also submitted a number of amendments to it.
The draft report itself, for such a technical subject as this, is very readable. It highlights a very important aspect of the whole business and that is the taxation aspect. The very key sentence in the draft report is on the bottom of page 4 which states:
The Joint Committee is informed that in none of the other Member States except the United Kingdom are unit trusts or their counterparts subject to capital gains tax. In the United Kingdom gains are charged at half the normal rate, (i.e. 15%) and unitholders on selling their units receive a credit at half the basic income tax rate (i.e. 17½%) whether the unit trust has realised or been taxed on any gains. More precise information on the taxation of CIUTS in the other Member States is contained in the Appendix.
On page 5 it is stated:
If the Irish unit trust industry is to withstand the competition envisaged and to be given a fair chance of expanding the Joint Committee believes that its liability to capital gains tax needs to be reviewed before the proposed Directive is implemented. At least as a first step the tax liability should, in the Joint Committee's view, be reduced to the British level.
That is a very clear-cut net issue and I think we have, one way or another, worked ourselves into a disadvantageous situation in this context. I take it that the Committee agree with that recommendation? We could now take Senator FitzGerald's amendments.