Written Answers Nos. 187 to 201
187. Deputy Timmy Dooley asked the Minister for Finance if he will consider using car parking fees as an option for commuters availing of the annual tax saver scheme; and if he will make a statement on the matter. [3298/15]
Amharc ar fhreagraThe travel pass (Tax Saver) scheme was introduced originally in Finance Act 1999 to encourage greater use of public transport by providing an exemption from BIK (Benefit-In-Kind taxation) for employer-provided bus and rail passes.
While the scheme has proved very popular since its introduction it is not practical, in the current economic circumstances, to consider its extension in any way that would increase the cost to the Exchequer. I would be concerned also that to extend the scheme in the manner proposed by the Deputy would perhaps have the unintended effect of increasing the distance driven by commuters before they switch to public transport. There could also be difficulties in terms of administering such a change and minimising any opportunity for its misuse.
188. Deputy Pearse Doherty asked the Minister for Finance the purpose of the finance (tax appeals commission) Bill; and if he will make a statement on the matter. [3300/15]
Amharc ar fhreagraAmong the measures announced in Budget 2014 was reform of the 'Role, functions and structure of the Office of the Appeal Commissioners, who hear appeals against assessments, decisions and determinations of the Revenue Commissioners on a variety of taxes, and of the tax appeals system'. The stated objective was "To ensure an enhanced and cost effective appeal mechanism for tax cases, providing transparency and increased certainty for taxpayers."
Since then a public consultation has taken place and officials of my Department have engaged with stakeholders regarding proposals for reform as well as with the Office of the Attorney General.
The Government has approved the drafting of the Finance (Tax Appeals Commission) Bill on the basis of heads of Bill which incorporate the following main elements: the establishment and structure of the Commission; appointment and removal process for Appeal Commissioners; terms and conditions of Appeal Commissioners; staff and funding of the Commission and its accountability. The heads also provide for a wide range of amendments to the legislation governing appeals in relation to the various taxes under the care of the Revenue Commissioners and consequential amendments to the various tax and duty Acts arising from the reform measures.
In accordance with the Agreed Protocol for Pre-Legislative Scrutiny by Oireachtas Committees, the heads of Bill were sent to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform. The pre-legislative scrutiny process with the Joint Committee will commence this week.
189. Deputy Pearse Doherty asked the Minister for Finance in view of the high number of young persons who have emigrated over the past number of years, if he will instruct the State-owned banks to carry out a review of inactive accounts to ensure that persons who have emigrated are not continuously being charged maintenance fees for accounts they no longer use or for overdraft facilities they are not using; and if he will make a statement on the matter. [3333/15]
Amharc ar fhreagraAs the Deputy is aware, I have no direct function in the relationship between banks and their customers. I have no statutory function in relation to banking decisions made by individual lending institutions at any particular time as these decisions are taken by the board and management of the relevant institution. A Relationship Framework has been specified that defines the nature of the relationship between the Minister for Finance and each bank. These Frameworks were published on 30 March 2012 and can be found at:
http://www.finance.gov.ie/what-we-do/banking-financial-services/shareholding-management-unit/shareholding-management-unit
As the matter raised is a commercial and operational issue between the banks and their customers, I can confirm that I do not intend instructing the banks as suggested by the Deputy.
190. Deputy Pearse Doherty asked the Minister for Finance the salary the new AIB chief executive officer will earn; and if he will make a statement on the matter. [3337/15]
Amharc ar fhreagraThe recruitment process for AIB's new Chief Executive Officer has only just commenced and the appointment to this position together with the relevant terms (including remuneration) will be a matter for the Board of the bank initially and then be subject to my consent. As the Deputy will be aware, this Government's policy with respect to banking remuneration has been in place since mid-2011. In summary, remuneration is capped at €500,000 (excluding normal pension entitlements) and variable rate pay such as bonuses are not permitted. AIB has not requested a review of the salary cap or bonus restrictions and there are no plans in train to change these restrictions.
191. Deputy Terence Flanagan asked the Minister for Finance the reason behind the decision to regulate the servicing agent for the mortgage rather than the owner or fund holding the loan when preparing the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015; and if he will make a statement on the matter. [3394/15]
Amharc ar fhreagraDuring last summer, my Department undertook a public consultation process in relation to the proposed legislation to protect consumers when loan books were sold. This consultation process highlighted an issue with a passive special purpose vehicle, SPV, which we had not intended to intend regulate, outsourcing servicing to a firm that would not be regulated. It became clear from the consultation process that credit servicing, as the customer-facing activity, was the appropriate activity to regulate and this legislation achieves this. Responses to the consultation process were published on my Department's website www.finance.gov.ie .
Once it had been decided to regulate credit servicing rather than ownership, consideration was given to the appropriateness of regulating ownership. While the owner may make decisions on a credit agreement, it is the credit servicer who will communicate these decisions to the borrower. After considerable and detailed examination, I now accept that the best way of ensuring the borrower is protected and retains access to the Financial Services Ombudsman is to regulate credit servicing and ensure borrowers can complain to the Financial Services Ombudsman about any actions affecting the borrower.
The Bill has now been published and I look forward to Second Stage in the House next week.
192. Deputy Terence Flanagan asked the Minister for Finance the progress of the Living City Initiative; and if he will make a statement on the matter. [3397/15]
Amharc ar fhreagraOfficials from my Department have held preliminary discussions with the relevant local authorities to identify the areas of the six cities, Cork, Dublin, Galway, Kilkenny, Limerick and Waterford, which might fall within the scope of the scheme. Each of the local authorities has now submitted proposals on the areas which it believes should be included. Further discussions will be held in due course.
My officials have also been in contact with the EU Commission on the application for State aid approval for the Initiative. A number of amendments were made to the Living City Initiative in Finance Act 2014 to ensure that the scheme was in accordance with EU State aid rules. These include the imposition of a cap on the level of relief for the commercial element of the scheme. This means the scheme now falls within the de minimis regulation. My officials are in discussions with the relevant local authorities and Revenue regarding operationalizing the scheme. Once the scheme is ready to commence I will make an announcement, in conjunction with my Cabinet colleagues and the local authorities concerned.
It is important to note that I do not see this as a wide-spread initiative, as it is targeted at those areas which are most in need of attention.
193. Deputy Clare Daly asked the Minister for Finance the reason staff who had multiple renewals of temporary contracts working for the Revenue Commissioners in Ennis, County Clare were not awarded permanent contracts, and to make a statement regarding this practice; and if he will make a statement on the matter. [3405/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the temporary staff in question were recruited to carry out work associated with the introduction of Local Property Tax (LPT). The task of introducing this new tax, the largest extension of the self-assessment system in the history of the State, posed major administrative challenges. The staffing model for its introduction was built on flexible deployment, which included recruiting additional staff on a temporary basis.
The temporary staff in Ennis were employed on fixed-term contracts which specifically stipulated that their employment would end on a specific date or when the task for which they had been employed was completed. In accordance with their contracts, employment of these temporary staff will cease on 27 March 2015.
The recruitment and appointment of permanent staff in Revenue is regulated by the Commission for Public Service Appointments (CPSA). All recruitment for permanent clerical positions in Revenue must be carried in accordance with the recruitment licence granted by the Commission. The licence held by Revenue does not provide for the awarding of permanent contracts to these staff on the basis of their temporary employment.
In January 2014 Revenue ran a competition which enabled serving temporary Revenue staff, including those in Ennis, to fill a number of permanent posts. More recently, the Public Appointments Service held an open clerical officer competition which closed in July 2014. Temporary Revenue staff were eligible to apply for this competition. Revenue will recruit from this panel to fill permanent clerical officer positions as they arise.
194. Deputy Brendan Griffin asked the Minister for Finance if he will investigate a matter (details supplied) concerning the National Asset Management Agency; and if he will make a statement on the matter. [3407/15]
Amharc ar fhreagraI am advised by NAMA that it has an exposure through its loans to two of the five developments referenced in the Deputy's Parliamentary Question. NAMA advises that in both cases, the developments are managed by the Joint Fixed Charge Statutory Receivers.
The Receivers are responsible for, inter alia, overseeing the sale of properties in accordance with NAMA's requirement that all such sales be fully openly marketed. As the Deputy will be aware the Receivers are obliged, in accordance to their independent statutory and fiduciary duties as agents of the original borrowers, to maximise the proceeds from all sales. The Receivers will, following the culmination of the related sales processes, make a recommendation to NAMA, which it, in turn, will consider in the context of its statutory mandate to maximise the return to Irish taxpayers from the management and ultimately the sale of loans and the sale of properties and other assets securing those loans by debtors and receivers of.
I would advised the Deputy to contact NAMA directly on this issue or similar queries raised by his Constituents and NAMA will follow up directly with the owner of the related property or, as in this instance, the appointed receivers. I am advised by NAMA that members of the public can raise any sales related query or complaint directly with it through its dedicated email address, info@nama.ie and that all such queries are followed-up on and responded to quickly.
195. Deputy Mary Lou McDonald asked the Minister for Finance the reason the Revenue Commissioners reports a 95% compliance rate for payment of the property tax for the year 2014, in view of the fact that the Revenue Commissioners collect payment from source. [3411/15]
Amharc ar fhreagra196. Deputy Mary Lou McDonald asked the Minister for Finance if some residential properties are exempt from payment of the property tax; and if so, the types of properties. [3412/15]
Amharc ar fhreagraI propose to take Questions Nos. 195 and 196 together.
The Revenue Commissioners have confirmed that the payment compliance rate for 2014 Local Property Tax (LPT) is approximately 95% at present. This includes applying mandatory deduction at source from salary or occupational pensions in relation to about 40,000 properties.
I am advised that those property owners who have been subject to mandatory deduction at source are still obliged to submit their LPT Return including their self-assessment of LPT due in respect of their residential property. Any property owner who has yet to comply with these obligations should do so as soon as possible in order to avoid paying interest on any outstanding tax or possibly being selected for a Revenue audit which may give rise to additional tax, interest and penalties being charged.
Regarding exemptions from the tax, the Finance (Local Property Tax) Act 2012 (as amended) defines a residential property as any building or structure (or part of a building) which is used as, or is suitable for use as, a dwelling. Part 2 of the LPT Act outlines the LPT exemptions that are available. A broad outline of exempt properties includes:
- New and previously unused properties that are purchased from a builder or developer between 1 January 2013 and 31 October 2016;
- Properties purchased between 1 January 2013 and 31 December 2013, if occupied as the sole or main residence of the purchaser;
- Residential properties constructed by a builder or developer that remain unsold and have not been used as dwellings;
- Properties in unfinished housing estates as prescribed by the Minister for the Environment, Community and Local Government;
- Properties certified as having significant pyritic damage;
- Registered nursing homes;
- Unoccupied properties which had been the sole or main residence of a person who has vacated the property because of long term mental or physical infirmity;
- Properties occupied by permanently and totally incapacitated individuals as their sole or main residence;
- Residential properties owned by a charity or public body and used to provide "special needs accommodation";
- Properties used by a charity in connection with recreational activities;
- Properties fully subject to commercial rates;
- Diplomatic properties exempt under other legislation.
I am advised by the Commissioners that details of these exemptions were also provided on page 10 of the Guide to LPT, which was issued to all property owners in March/April 2013. The Deputy may also find the following link (http://www.revenue.ie/en/tax/lpt/exemptions.html ) from the Revenue website helpful as it provides additional details of the various exemptions from the tax.
As regards liability for payment of the tax, the Commissioners have also confirmed that where a property has not reached the stage of construction where it is suitable for use as a dwelling until after 1 May 2013, it is outside the scope of LPT for the first valuation period of 1 May 2013 to 31 October 2016. Accordingly, the owner would not be liable to pay LPT on the property until 2017. I am further advised that a property that was not liable to LPT on 1 May 2013 on the basis that it was uninhabitable will not be liable to LPT for the years 2013 to 2016. If such a property were to be refurbished to make it suitable for use as a dwelling by 1 November 2016 then it will be liable to LPT for 2017 and subsequent years.
197. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the proceeds by institution from the disposal of investments in the State supported banks in each year since 2012; and if he will make a statement on the matter. [3414/15]
Amharc ar fhreagraIn response to the Deputy's question, the following table details of the proceeds from the sale of the State's investments in the banks since 2012:
Details of the proceeds from the sale of the State's investments in the banks since 2012
|
Date of disposal |
Bank |
Transaction |
Total proceeds including accrued interest/dividend |
|
2012 no disposals |
|
|
|
|
January 2013 |
Bank of Ireland |
Sale of convertible contingent capital notes (CoCos) |
€1.06bn |
|
July 2013 |
Permanent tsb |
Sale of Irish Life |
€1.34bn |
|
December 2013 |
Bank of Ireland |
Sale/redemption of preference shares |
€2.05bn |
|
2014 and 2015 to date no disposals |
198. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the fees received from the eligible liabilities guarantee scheme in each year since its inception. [3415/15]
Amharc ar fhreagraFees paid by the covered institutions in respect of the ELG Scheme guarantee are paid quarterly in arrears and therefore there is a time lag before the fees are paid into the Exchequer (i.e. fees received as cash in Q1 of 2015 are in respect of fees accrued for Q4 of 2014). As the ELG Scheme came into operation on the 9th of December 2009 no fees were received into the Exchequer until 2010. The figures below are presented on an accrued basis.
The total fees received to date from the covered banks in respect of the ELG Scheme amounts to c.€3.6bn which does not include interest accrued.
|
Year |
€millions |
|
2010 |
854.8 |
|
2011 |
1,234.6 |
|
2012 |
951.2 |
|
2013 |
421.3 |
|
2014 |
155.2 |
|
Total |
3,617.1 |
199. Deputy Timmy Dooley asked the Minister for Finance the efforts being made to provide access to full-time Civil Service employment for the 62 temporary clerical officers working for the Revenue Commissioners in Ennis, County Clare; and if he will make a statement on the matter. [3426/15]
Amharc ar fhreagra200. Deputy Timmy Dooley asked the Minister for Finance if there will be continuous temporary employment for the 62 temporary clerical staff working for the Revenue Commissioners in Ennis, County Clare; and if he will make a statement on the matter. [3427/15]
Amharc ar fhreagraI propose to take Questions Nos. 199 and 200 together.
I am advised by the Revenue Commissioners that the temporary staff in question were recruited to carry out work associated with the introduction of Local Property Tax (LPT). The task of introducing this new tax, the largest extension of the self-assessment system in the history of the State, posed major administrative challenges. The staffing model for its introduction was built on flexible deployment, which included a mix of experienced existing staff, additional staff on a temporary basis, and an external call centre service to provide an information help line.
Revenue has informed me that this flexible mix of resources was considered the most effective model available and was vital to the successful introduction of the tax in a relatively short period of time. The temporary staff in Ennis were employed on fixed-term contracts which specifically stipulated that their employment would end on a specific date or when the task for which they had been employed was completed. In accordance with their contracts, employment of these temporary staff will cease on 27 March 2015. Revenue is not in a position to offer them permanent employment when their fixed-term contracts expire.
The recruitment and appointment of permanent staff in Revenue is regulated by the Commission for Public Service Appointments. All recruitment for permanent clerical positions in Revenue must be carried in accordance with the recruitment licence granted by the Commission. The licence held by Revenue does not provide for the awarding of permanent contracts to these staff on the basis of their temporary employment. However, they are eligible to apply in the normal way for any open competitions being run by the Public Appointments Service (PAS) or Revenue for the recruitment of permanent staff.
The Deputy will be aware from a previous representation that in January 2014 Revenue ran a competition which enabled serving temporary Revenue staff, including those in Ennis, to fill a number of permanent posts. More recently, the Public Appointments Service held an open clerical officer competition which closed in July 2014. Temporary Revenue staff were eligible to apply for this competition. Revenue will recruit from this panel to fill permanent clerical officer positions as they arise.
201. Deputy Derek Nolan asked the Minister for Finance if recent changes in the cap on the finance-benefit in kind transfers that parents can gift to their children tax free also refer to the transfer of land, either as a site for a house or as a farm; if land is an asset for inheritance or gift during lifetime purposes in transactions between parents and offspring; and if he will make a statement on the matter. [3445/15]
Amharc ar fhreagraCapital Acquisitions Tax (CAT) is the overall name for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance.
I am informed by the Revenue Commissioners that, for the purposes of CAT, the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary), determines the maximum life-time tax-free threshold known as the "Group threshold" - below which gift or inheritance tax does not arise.
There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.
Group A: tax free threshold €225,000 - applies where the beneficiary is a child (including adopted child, stepchild and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
Group B: tax free threshold €30,150 - applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.
Group C: tax free threshold €15,075 - applies in all other cases.
In the case of the Group A tax-free threshold, each child is separately entitled to receive life-time gifts or inheritances up to the total value of €225,000 from his or her parents before that child would have any liability to CAT. Gifts or inheritances received by the child since 5 December 1991 from his or her parents are aggregated for the purposes of determining whether this threshold is exceeded. CAT is charged on the amount of the gift or inheritance that exceeds the child's tax-free threshold of €225,000 at the rate of 33% and on that excess only.
Land, either as a site or as a farm, is an asset for both gift and inheritance tax purposes and the transfer of such capital assets by parents to children, either during the lifetime of the parents, or on the death of the parents, is within the scope of CAT. The transfer of such capital assets has always been subject to CAT and the Finance Act 2014 changes in restricting the CAT exemption for normal and reasonable payments made by parents to children for their support, maintenance or education has not changed this position.
It should be noted that since the introduction of CAT in 1975 special treatment has been afforded to gifts or inheritances of agricultural property however, this does not apply to gifts of sites for house building. Agricultural Relief is available provided the conditions applicable to the relief are fulfilled. The effect of the relief is that market value of agricultural property gifted or inherited is reduced significantly for the purposes of determining the amount of CAT, if any, payable on a gift or inheritance of such property. Currently, the market value of agricultural property is reduced by 90%.
This means that, where agricultural relief applies, parents can normally transfer agricultural property up to the value of €2,250,000 to each of their children, provided the children satisfy the conditions applicable to the relief, without any liability to CAT arising on the transfer. If the agricultural property is worth €2,250,000 and agricultural relief applies, the taxable value of the agricultural property is reduced by 90% from €2,250,000 to €225,000 for CAT purposes. Assuming the child has received no previous gifts or inheritances from the parent since 5 December 1991, the reduced value of the gift or inheritance equals the €225,000 tax-free threshold resulting in no CAT liability for the child.
This special treatment of agricultural property for CAT purposes ensures that the transfer of most family farms by parents to children, either by way of gift or inheritance, is not subject to CAT.
1. Agricultural Property includes: agricultural land, pasture and woodland, crops, trees and underwood growing on such land, farm buildings, farm houses, farm machinery and livestock and bloodstock.
