Dáil Éireann Debate, Thursday - 4 December 2014
68. Deputy Joanna Tuffy asked the Minister for Finance if he will provide an update on all tax reliefs on income tax either eliminated or being phased out from budget 2012 onwards; the estimated savings to date for each; and if he will make a statement on the matter. [46580/14]
Amharc ar fhreagraI understand the Deputy to be referring to reliefs or credits eliminated or commencing to be phased out with effect from Budget and Finance Act 2012. The tax reliefs and credits which follow below were ceased or are being phased out since Budget and Finance Act 2012. (Section numbers refer to the Taxes Consolidation Act 1997.)
I am advised by the Revenue Commissioners that tax returns for 2013 were only due last month so that data have not yet been processed or made available for analysis. Returns for 2014 are not yet filed. Estimated costs of reliefs, allowances and credits for 2012 are being prepared and will be published shortly on Revenue's statistics website http://www.revenue.ie/en/about/statistics/index.html. Updates for later years will be published in due course on the same webpage. In the absence of this information I am providing the Budget estimates relating to the various credits or reliefs, where available.
Section 87A and section 381B Section 18 of the Finance Act 2013 applied the following changes, with effect from 13 February 2013, to the taxation of certain individuals deemed to be engaged in the trade of dealing in or developing land:
- Loss relief, related to both the decline in land values and interest deductions, was restricted to circumstances where the decline in value is actually realised and interest on the funding loan is actually paid, and
- The write-off of debts used to acquire land as trading stock, became an income receipt.
The purpose of these changes was to deny tax deductions in circumstances where there is no real economic loss suffered by the taxpayer.
Section 88A and section 472A Section 7 Finance Act 2013 discontinued the double deduction in respect of certain emoluments and relief for the long term unemployed, in respect of employments commencing on or after 1 July 2013. They were replaced by the new JobsPlus scheme.
Section 201 Foreign Service Relief on ex gratia termination lump-sum payments, provided for in section 201 of Taxes Consolidation Act 1997, was abolished with effect from the passing of Finance Act 2013 (27 March 2013).
Section 201 and Schedule 3 Top Slicing Relief (TSR) on ex-gratia lump sums payments was ceased from 1 January 2013 where the payment was €200,000 or over. The yield was estimated at €10m in a full year. TSR was abolished completely for ex gratia payments made on or after 1 January 2014 with an expected yield of €22m in a full year.
Section 201 A lifetime limit of €200,000 on the amount that may be paid tax-free was applied to ex-gratia payments made on account of the death or disability of an employee in Finance Act 2013. Any amount exceeding €200,000 is taxable in full.
Section 253 Relief to individuals on loans applied in acquiring an interest in a partnership was abolished for new loans with effect from 15 October 2013. Relief for existing loans was restricted commencing in 2014, with relief being reduced on a sliding scale each year until 2016 with no relief available in 2017. Savings of €1m in 2014, and €4m for each year thereafter, were estimated.
Section 462 The One Parent Family Tax Credit (OPFTC) of €1,650 for a single individual with whom a qualifying child resided during a tax year was ceased at 31 December 2013. It was replaced by the Single Person Child Carer Credit from 1 January 2014. This was estimated to yield €18m in 2014 and €25m in a full year.
Section 470 A cap was introduced on relief for premiums for qualifying health insurance policies in respect of policies entered into or renewed on or after 16 October 2013. A maximum relief of €1,000 per adult and €500 per child covered by a policy was introduced. This was estimated to yield €94m in 2014 and €127m in 2015.
Section 470B The Age Related Tax Credit (ARTC) for private health insurance policies taken out or renewed during 2012 by a person aged over 60 but less than 65 years was reduced from €625 to €600. This coincided with a move from age bands of 10 years to five years, with the credit for the 60 to 65 age group being reduced, while the rates for the other relevant age categories were increased. The ARTC scheme ceased with effect from 31 December 2012 but was replaced by the Risk Equalisation scheme. Both schemes were self-financing via a levy on the health insurance companies.
Section 481 Relief for individuals to invest in qualifying films is being abolished with effect from 1 January 2015. The cost to the exchequer for the relief in 2013 is estimated to be €76m based on investors spending €185m and claiming relief at 41%. It is being replaced by a Corporation Tax credit with relief at 32%. Therefore, if a similar expenditure of €185m was incurred there would be a saving to the exchequer of €17m. The budget estimate (2013) was for a saving of €20m in 2016.
Section 825B Repayment of tax where earnings are not remitted was phased out with effect from tax year 2012 with end year of 2015. The Special Assignee Relief Programme (SARP - section 825C) was introduced from tax year 2012.
Section 848A The scheme of tax relief for donations made to approved bodies (i.e. charities etc.) was amended in a number of respects with effect from 1 January 2013. One of the changes was that relief for donations made by self-assessed taxpayers, previously obtained by way of a deduction from taxable income, was aligned with that for PAYE-only taxpayers such that the relief is now given on a "grossed-up" basis at the rate of 31% to the approved body (and not to the donor). This and the other changes made were on a cost neutral basis.
