Written Answers Nos. 61-69
61. Deputy Terence Flanagan asked the Minister for Finance his plans to strengthen legislation to deal with illegal moneylenders as requested by the Society of St. Vincent de Paul; and if he will make a statement on the matter. [39748/14]
Amharc ar fhreagra80. Deputy Terence Flanagan asked the Minister for Finance his plans to ensure there is more transparency regarding moneylender charges and profits and that a proper payment schedule be outlined by the lender including a cooling-off period; and if he will make a statement on the matter. [39742/14]
Amharc ar fhreagraI propose to take Questions Nos. 61 and 80 together.
Under the current legislative requirements, moneylenders must provide a schedule of repayments both prior to and during the credit agreement. Each licensed moneylender is also required to display a copy of its licence in its business premises. The licence contains a schedule of each product which the moneylender is entitled to offer, together with details of the related cost per €100 borrowed, the collection charge (if applicable) and the APRC. Moneylenders are not permitted to charge an additional fee for late or missed payments.
The protections of a cooling off period are also in place for consumers of licensed moneylenders in Ireland, under Regulation 17 of the European Communities Consumer Credit Agreements Regulations, 2010. A consumer may, within 14 calendar days after the relevant day...., withdraw from a credit agreement without giving any reason.
Moneylenders are subject to a range of transparency and disclosure requirements. The Central Bank's recent research on the moneylending industry highlighted that the majority of consumers understand the cost of credit, Annual Percentage Rate of Charge and amount of interest on their loans. Measures taken by the Central Bank to increase transparency and clarity (such as including the cost of a loan per €100 borrowed on the moneylenders licence) aim to increase consumer awareness with regard to costs.
I have no plans at present to change the legislation which deals with moneylenders. The enforcement of this legislation in relation to illegal moneylenders is a matter for An Garda Síochána and I would urge anyone with information about the operation of unlicensed moneylenders to make the information available to the Garda Síochána, whose duty it is to enforce the law in this area.
62. Deputy Terence Flanagan asked the Minister for Finance his views on an article (details supplied); and if he will make a statement on the matter. [39519/14]
Amharc ar fhreagraAs the Deputy will be aware the Relationship Frameworks we have in place provide that the State will not intervene in the day-to-day operations of the State supported banks or their management decisions.
Moreover, I have been informed that due to data protection rules and customer confidentiality the banks are not in a position to discuss details of individual customer circumstances.
63. Deputy Terence Flanagan asked the Minister for Finance his views on a matter (details supplied) regarding a bank; and if he will make a statement on the matter. [39533/14]
Amharc ar fhreagraAs the Deputy will be aware the coupon due on the AIB preference shares is payable in the month of May each year. Under the preference share agreement it is a matter for the Board of the bank to decide on whether this payment is made in the form of cash or shares.
When taking this decision the Board must review the financial position of the bank to ensure that the bank remains appropriately capitalised. Since the inception of the preference share in 2009 the bank has paid each of the coupons in the form of a bonus share issue as provided for under the preference share agreement. Any cash that might have been paid each year was therefore retained in the bank in which we are now a 99.8% shareholder. This year the Board's decision was influenced by the proximity of the ECB's Comprehensive Assessment exercise.
Further details in relation to the provisions governing the State's preference shares can be found in AIB's Memorandum and Articles of Association which is a public document.
64. Deputy Lucinda Creighton asked the Minister for Finance if he will support small businesses investment by introducing a scheme similar to the enterprise management incentive scheme in the UK, which is income tax-free, and ensures that a shareholding with a market value of up to €250,000 may be subjected to just 10% capital gains tax or if he will support other measures to encourage employees to become shareholders in the businesses in which they are working; and if he will make a statement on the matter. [39314/14]
Amharc ar fhreagraAs the Deputy will be aware, my Department carried out a review of the Employment and Investment Incentive (EII) and Seed Capital Scheme (SCS) in advance of this year's Budget. This scheme provides income tax relief for risk capital investments in a broad range of SMEs. Part of the review of the incentive included a public consultation process. A report on this review was published on Budget Day and is available on the Budget website.
One of the options considered in the review was the introduction of a scheme similar to the UK EIS. However, I decided against it.
Having considered all of the issues raised in the report, I have decided to make the following amendments to the EII:
- The annual company limit is being increased from €2.5 million to €5 million and the lifetime limit from €10 million to €15 million; The minimum holding period for shares is being increased by 1 year to 4 years;
- Medium-sized companies in non-assisted areas will be included;
- Internationally traded financial services where certified by Enterprise Ireland will qualify;
- Hotels, guest houses and self-catering accommodation will remain eligible for a further 3 years; and
- The operating and managing of nursing homes will be included for 3 years.
These measures are subject to approval from the European Commission.
The SCS is being re-branded as "Start-Up Relief for Entrepreneurs" (SURE) and will be re-launched in the coming months.
65. Deputy Lucinda Creighton asked the Minister for Finance his plans to incentivise investment in small businesses when the capital gains tax burden on business has increased by 65% in recent years and if he will support a system, following the US example, where capital gains on assets held for more than 12 months are taxed at a maximum rate of 20%, or Britain where the rate is reduced by its entrepreneurs’ relief scheme to 10%; and if he will make a statement on the matter. [39315/14]
Amharc ar fhreagraThe rate of CGT is 33% and has been increased four times since 2008 when it stood at 20%. These rate increases were necessary to protect the yield from CGT in the context of the rebalancing of the public finances. In the circumstances, increases in the taxation of capital were considered preferable from the point of view of the impact on the economy as compared to an increase in employment taxes such as income tax. The changes to income tax and to the Universal Social Charge which I announced in my Budget speech on Tuesday last will benefit taxpayers (particularly those on low and middle incomes) and businesses, generally.
In common with all taxes, CGT is subject to on-going review and all reliefs and exemptions are carefully considered. In the circumstances in which we have found ourselves in recent years, and as opposed to embedding major long-term changes to the tax system, the approach (particularly in CGT) has increasingly been to introduce changes which are targeted and which apply for short-term periods to achieve focused outcomes.
Section 45 of Finance (No 2) Act of 2013 provides for a CGT relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets. Commencement of the legislative provisions is subject to EU state-aid approval. Discussions with the EU Commission about State Aid clearance have been ongoing but I hope that these will result in a positive outcome in the near future. Notwithstanding that the legislative provisions have yet to be commenced, the CGT relief will only apply, among other conditions, where new chargeable business assets acquired after 1 January 2014 and up to end-December 2018 are disposed of having been held for a minimum period of 3 years after acquisition in that period.
Finally, I announced a number of measures in my Budget 2015 speech which will assist with investment in small businesses. The amount of finance that can be raised by a company under the Employment and Investment Incentive is being increased from €2.5 million to €5 million per annum. The lifetime limit is also being increased from €10 million to €15 million. Among other changes, investment in the management and operation of nursing homes, medium-sized enterprises in non-assisted areas and internationally traded financial services that are certified by Enterprise Ireland will qualify under the scheme. In addition, the Seed Capital Scheme will be re-launched in the coming months. These amendments are subject to the approval of the European Commission.
66. Deputy Anthony Lawlor asked the Minister for Finance if, under the current legislation, the Central Bank of Ireland may instruct banks to set a mortgage deposit at a specific rate, if so, are there plans to introduce such legislation; and if he will make a statement on the matter. [39535/14]
Amharc ar fhreagraThe Central Bank of Ireland published a Consultation paper on 7 October 2014 which includes proposals for new macro-prudential measures to enhance the resilience of the banking sector and households to housing market developments.
I understand that the consultation paper proposes a number of measures, one of which is to require lenders to restrict new lending for primary dwelling purchase above 80 per cent LTV to no more than 15 per cent of the euro value of all housing loans for principal dwelling home purposes entered into in a six monthly period.
The Central Bank has now commenced a consultation process on the proposed measures, and submissions and comments on these can be made to realestate@centralbank.ie by 8th December 2014.
The legal basis for the introduction of the proposed measures would be by a regulation issued by the Central Bank under Section 48 of the Central Bank (Supervision and Enforcement) Act 2013.
67. Deputy Eric Byrne asked the Minister for Finance when the pension levy (details supplied) will come to an end; and if he will make a statement on the matter. [39537/14]
Amharc ar fhreagra68. Deputy Finian McGrath asked the Minister for Finance his views on a matter (details supplied) regarding the pension levy; and if he will make a statement on the matter. [39575/14]
Amharc ar fhreagra73. Deputy Terence Flanagan asked the Minister for Finance if there are plans to abolish the pension levy (details supplied); and if he will make a statement on the matter. [39678/14]
Amharc ar fhreagraI propose to take Questions Nos. 67, 68 and 73 together.
The position in this matter is that I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 would be abolished after this year. I did, however, introduce an additional levy on pension fund assets at a rate of 0.15% for 2014 and 2015. I did this to continue to help fund the Jobs Initiative and also to help make provision for potential State liabilities which may emerge from difficulties facing pension funds.
The abolition of the 0.6% levy after this year and the application of the 0.15% levy for this year and next are reflected in the Finance (No. 2) Act 2013 legislation which gave legal effect to these Budget 2014 announcements.
In my Budget 2015 speech on Tuesday last, I again confirmed the ending of the 0.6% levy this year and the ending of the lower 0.15% levy next year.
69. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to the situation where the families of those who have died by suicide may be liable for the mortgage on a property until an inquest is concluded as the insurance cannot be assessed; his plans to allow for a more compassionate system. [39581/14]
Amharc ar fhreagraNeither I nor the Central Bank has a statutory role in relation to the issue raised by the Deputy and the decision on whether and when to pay out on a policy depends on the specific contract.
However I have been advised by Insurance Ireland that in accordance with policy conditions, insurers would usually be unable to make a payment on a policy until the cause of death is confirmed.
I understand some lenders suspend mortgage repayments on a property until the inquest results are available and I would encourage other lenders to do the same.
The Financial Services Ombudsman's Bureau was established under the Central Bank and Financial Services Authority of Ireland Act, 2004. The legislation provides for an independent, impartial investigation and resolution of disputes between consumers and financial service providers.
The Financial Services Ombudsman was set up to adjudicate on unresolved disputes between complainants and financial service providers.
The services of the Ombudsman are free to the complainant.
If a consumer has made a formal complaint to the financial institution in question and if not satisfied with the reply received, then he/she may contact the Financial Services Ombudsman in relation to the matter.
