Dáil Éireann Debate, Tuesday - 15 July 2014
209. Deputy Pearse Doherty asked the Minister for Finance to set out the partial and full year revenue that would be raised for the Exchequer by increasing the rate of capital gains tax from 33% to 40%. [31228/14]
Amharc ar fhreagra210. Deputy Pearse Doherty asked the Minister for Finance whether it is possible and the amount that would be raised by eliminating the capital gains tax exemption for seven years for properties bought from December 2011 to 2013. [31229/14]
Amharc ar fhreagra211. Deputy Pearse Doherty asked the Minister for Finance to set out the partial and full year revenue that would be raised for the Exchequer from abolishing capital gains tax exemptions for private principal residences sold in excess of €1 million. [31230/14]
Amharc ar fhreagra240. Deputy Pearse Doherty asked the Minister for Finance to set out the partial and full year cost to the Exchequer of dividing the capital gains tax categories into passive and active and applying a 40% rate to the passive CGT activity, that is, buying shares and the existing rate to active engagement, that is, selling on a business. [31260/14]
Amharc ar fhreagraI propose to take Questions Nos. 209 to 211, inclusive, and 240 together.
I am advised by the Revenue Commissioners that the yield to the Exchequer, estimated from increasing the Capital Gains Tax (CGT) rate from 33% to 40% could be in the region of €105 million in a full year. A partial year yield is not available as it would depend on the date of introduction of the proposal. This estimate includes corporate gains. I am advised by the Commissioners that the estimate assumes no behavioural changes on the part of taxpayers. Increases in rates may have a significant behavioural impact and as a result may not produce the expected increase in tax yield.
Regarding the capital gains tax exemption for properties bought in the period 7 December 2011 to 31 December 2014 and held for at least 7 years, I am informed by the Revenue Commissioners that the CGT relief contained in Section 604A of the Taxes Consolidation Act 1997 (enacted in Finance Act 2012 and extended by Finance (No 2) Act 2013) will have no cost, in terms of CGT forgone, for a period of seven years from the time any properties to which the relief applies were acquired. Any such properties sold within seven years of being acquired will not qualify for the relief. Disposals made after the seven year period of ownership will be subject to CGT on any gain but effectively at a reduced rate by reference to the fraction that seven years bears to the overall period of ownership. It is not possible at this time to estimate when such properties will be disposed of in the future or the amount of chargeable capital gain, if any, that may arise on such disposals. As to the question of removing the exemption, the position is that it will end shortly at the close of this year and there would very likely be legal issues around the removal of a relief from individuals who have already acted upon it in good faith.
In relation to principal private residences, I am informed by the Revenue Commissioners that, as information on the value of capital gains arising from the disposal of principal private residences is not required in CGT returns, there is no basis for separately identifying the yield that would arise from the removal of the exemption from CGT for sales of principal private residences above €1 million. Accordingly, the specific information requested by the Deputy is not available.
Regarding the final question, I am informed by the Revenue Commissioners that, as tax returns do not provide a basis for compiling estimates in relation to the amount of CGT liability separately associated with passive and active activity, it is therefore not possible to provide the information requested by the Deputy.
