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Tuesday, 29 Nov 2016

Written Answers Nos. 149-162

Pensions Legislation

Ceisteanna (149)

Pearse Doherty

Ceist:

149. Deputy Pearse Doherty asked the Minister for Finance the action which will be taken to recoup the pension tax relief given to the €73 million transferred overseas (details supplied); the anti-avoidance measures which can be put in place to stop this happening; and if he will make a statement on the matter. [37114/16]

Amharc ar fhreagra

Freagraí scríofa

The transfer of the deferred benefits of a member of an occupational pension scheme or a Personal Retirement Savings Account (PRSA) contributor's PRSA fund to an overseas pension arrangement is permitted, subject to the transfer complying with the Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations, 2003 and Revenue requirements. The Regulations are under the remit of the Minister for Social Protection and prescribe the conditions for transfers to arrangements established outside the State.

I am informed by the Revenue that many transfers of pension benefits overseas are made for legitimate reasons and are fully compliant with the transfer Regulations and Revenue requirements. The issue of seeking to recoup the tax relief provided to such individuals in building up their pension benefits here does not, therefore, arise.

Since 2012, all overseas pension transfer requests must be accompanied by a declaration signed by the individual concerned to the effect that the transfer is for bona fide reasons and conforms to all of the relevant transfer obligations. As I mentioned recently in my response to Deputy McGrath's Parliamentary Question No. 77 of 24 November 2016, since 2014 Revenue has been involved in an ongoing  compliance program in relation to the transfer of pension funds off-shore with the objective of seeking to ensure the legitimacy of such transfers. I also mentioned in that reply that seeking to move pension funds or PRSAs overseas in an effort to circumvent the requirements of Irish tax legislation may fall foul of the conditions under which they were approved by Revenue and that this could result in the withdrawal of approval, the effect of which would be the claw back of the tax relief previously given. I also made reference to the fact that, to date, no withdrawal of approval has taken place.

Finally, my Department has been engaged in a review of the whole area of pension transfers abroad in conjunction with Revenue, the Department of Social Protection and the Pensions Authority with a view to establishing what additional safeguards may be required in this area. This review is not yet completed. However, I am conscious of the need to ensure that any amendments to the existing arrangements do not impede or interfere with legitimate overseas transfers that allow individuals leaving the State permanently to simplify their tax affairs by taking their pensions savings with them, so that they can continue to save to provide an income in retirement.

Company Law

Ceisteanna (150)

Niall Collins

Ceist:

150. Deputy Niall Collins asked the Minister for Finance if he will address an issue raised by a person (details supplied) who has an ongoing complaint with the Office of the Director of Corporate Enforcement, ODCE, and wishes to view their documents; and if he will make a statement on the matter. [37115/16]

Amharc ar fhreagra

Freagraí scríofa

Section 790 of the Companies Act 2014 provides that no information, book or document relating to a company that has been obtained under any of sections 778 to 780, 783 or 787 of the Companies Act 2014 shall be published or disclosed unless (a) the company in question consents to the publication or disclosure, (b) the publication or disclosure is, in the opinion of the Director of the Office of Corporate Enforcement, required under any of section 791 (a) to (n) of the Companies Act 2014, or (c) the publication or disclosure is made to a competent authority specified in section 792 of the Companies Act 2014.

While disclosure can be made to me as one of the competent authorities listed under section 792, I am prohibited by section 790 from publication or disclosure of such documents. Given this prohibition, I cannot provide the documents which the person concerned wishes to view.

Departmental Funding

Ceisteanna (151)

Fergus O'Dowd

Ceist:

151. Deputy Fergus O'Dowd asked the Minister for Finance the funding that has been provided to County Louth from 2014 to 2016, inclusive, by project name, location and funding amount, in tabular form; and if he will make a statement on the matter. [37222/16]

Amharc ar fhreagra

Freagraí scríofa

There was no provision in the Vote for my Department for funding for projects for the years in question.

Departmental Funding

Ceisteanna (152)

Fergus O'Dowd

Ceist:

152. Deputy Fergus O'Dowd asked the Minister for Finance the applications submitted for funding projects from Louth County Council in each of the years 2014 to 2016, inclusive, in tabular form; and if the applications were successful. [37238/16]

Amharc ar fhreagra

Freagraí scríofa

There was no provision in the Vote for my Department for funding for projects for the years in question.

Departmental Funding

Ceisteanna (153)

Fergus O'Dowd

Ceist:

153. Deputy Fergus O'Dowd asked the Minister for Finance the funding for projects in 2017 in County Louth to be funded by his Department by project name, location and funding amount, in tabular form; and if he will make a statement on the matter. [37254/16]

Amharc ar fhreagra

Freagraí scríofa

There is no provision in the Vote for my Department for funding for projects in 2017.

Departmental Funding

Ceisteanna (154)

Fergus O'Dowd

Ceist:

154. Deputy Fergus O'Dowd asked the Minister for Finance the funding that has been provided to County Meath from 2014 to 2016, inclusive, by project name, location and funding amount in tabular form. [37270/16]

Amharc ar fhreagra

Freagraí scríofa

There was no provision in the Vote for my Department for funding for projects for the years in question.

Departmental Funding

Ceisteanna (155)

Fergus O'Dowd

Ceist:

155. Deputy Fergus O'Dowd asked the Minister for Finance the applications submitted for funding and projects from Meath County Council in each of the years 2014 to 2016, inclusive, in tabular form; if the applications where successful; and if he will make a statement on the matter. [37286/16]

Amharc ar fhreagra

Freagraí scríofa

There was no provision in the Vote for my Department for funding for projects for the years in question.

Departmental Funding

Ceisteanna (156)

Fergus O'Dowd

Ceist:

156. Deputy Fergus O'Dowd asked the Minister for Finance the funding for projects in 2017 in County Meath to be funded by his Department by project name, location and funding amount, in tabular form; and if he will make a statement on the matter. [37302/16]

Amharc ar fhreagra

Freagraí scríofa

There is no provision in the Vote for my Department for funding for projects in 2017.

Tax Code

Ceisteanna (157, 162)

Brendan Griffin

Ceist:

157. Deputy Brendan Griffin asked the Minister for Finance if the Revenue Commissioners will review its policy on patronage shares being assessed for income tax; and if he will make a statement on the matter. [37336/16]

Amharc ar fhreagra

Michael Healy-Rae

Ceist:

162. Deputy Michael Healy-Rae asked the Minister for Finance the status of letters issued to farmers regarding tax (details supplied); and if he will make a statement on the matter. [37474/16]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 157 and 162 together.

I would first note that, since the establishment of the Revenue Commissioners in 1923, successive Governments and the Oireachtas have reaffirmed the principle of the independence of the Revenue Commissioners in their dealings with the tax affairs of any individual under tax and customs legislation. This independence is seen as critical to maintaining the integrity of the taxation system and forms a key pillar of Revenue's Governance framework, and it would therefore be neither appropriate nor possible for a Minister for Finance to instruct the Revenue Commissioners to review their policy with regard to the administration of tax legislation.

I am advised by Revenue that patronage shares were received by suppliers of milk as a consequence of and in proportion to the quantity of milk supplied. Where the number of shares is based on and dependent on the level of business between the members and the cooperative or nominated purchaser and where the cooperative does not receive the market price for the shares issued, then the profit accruing i.e. the difference between the market value of the shares issued and the price paid for these shares, to the member is a trading receipt of the member's farming income. This is no different to the general tax treatment that applies to other forms of share based remuneration. Employees are liable to income tax on share awards for similar reasons the share award is linked to their work and as a consequence the value of any shares awarded is treated as taxable employment income.

Capital Gains Tax (CGT) applies to the growth in the value of a capital asset. For example, if an individual sells a share that grew in value after it was acquired, CGT would apply, subject to the availability of any exemption, on the increase in value between it being acquired and being sold. The matter at issue in the particular case, however, is the initial value of the shares received by farmers as a result of their trading relationship with the co-op. The shares were a form of payment received for the milk supplied by the farmers and therefore the value of the shares forms part of the trading income for the relevant years.

I am assured by Revenue that there has been no change in policy with regard to the imposition of income tax or CGT to share awards and they have emphasised that the matter at issue in this instance is the original market value of the shares received by farmers as a result of their trading relationship with the co-op.

I am further informed by Revenue that the letters which issued to certain farmers were invitations to engage with Revenue as regards their tax position for the years 2011 to 2013. The letters in question are in the first instance enquiries with the farmers concerned as to whether the value of the shares received has been included in the accounts for the years in question. Farmers who did include the share value in their accounts will not have any additional income tax liability in relation to the specific matter raised in these inquiries.

Early engagement with Revenue, where the share value received has been included in the accounts for the years in question, will mean an early conclusion of Revenue's enquiries. Early engagement with Revenue, where the share value received was not included in the accounts for the years in question, will facilitate a discussion between the individuals concerned and Revenue with a view to agreeing a mutually satisfactory arrangement, including if necessary, a phased payment arrangement, to deal with any tax liability involved. I am advised by Revenue that there have been extensive contacts with them in regard to this matter generally and they are and will be responding very quickly to those contacts in order to assist farmers to bring matters to an early conclusion.

I would ask the Deputies to encourage any farmers who have received a letter from Revenue in this matter to engage with Revenue without delay.

Mortgage Data

Ceisteanna (158, 159)

Michael McGrath

Ceist:

158. Deputy Michael McGrath asked the Minister for Finance the retail credit firms that currently own residential mortgages as per the residential mortgage arrears and repossessions statistics Q2 2016. [37344/16]

Amharc ar fhreagra

Michael McGrath

Ceist:

159. Deputy Michael McGrath asked the Minister for Finance the unregulated loan owners that currently own residential mortgages as per the residential mortgage arrears and repossessions statistics Q2 2016. [37345/16]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 158 and 159 together.

I am informed by the Central Bank that information collected by it relating to unregulated loan owners and retail credit firms, published in the Central Bank's quarterly statistics on mortgage arrears and repossessions, is subject to a strict confidentiality agreement with the providers of the data. It is, therefore, not possible to disclose this information.

Banks Recapitalisation

Ceisteanna (160, 161)

Pearse Doherty

Ceist:

160. Deputy Pearse Doherty asked the Minister for Finance if he will provide for each bank the State has a share in, the number of cases being investigated by the bank as part of its review into the sale of tracker mortgages; when each bank will conclude its investigation; and if he will make a statement on the matter. [37433/16]

Amharc ar fhreagra

Pearse Doherty

Ceist:

161. Deputy Pearse Doherty asked the Minister for Finance the number of cases in which each State backed bank has admitted it was at fault with regard with regard to the tracker mortgage investigations being undertaken by banks; the number of these cases in which the bank has made a redress arrangement with the mortgage owner; the number of legal cases being taken overall per bank; the number within those that have availed of a redress scheme in which legal action against the bank has begun or concluded; and if he will make a statement on the matter. [37434/16]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 160 and 161 together.

As the Deputy is aware, the Central Bank of Ireland announced in October 2015 that it would conduct a detailed review of Tracker Mortgage portfolios with all the banks under its supervision. The Central Bank sought to conduct a broad examination of tracker mortgage-related issues covering, among other things, transparency of communications with and contractual rights of tracker mortgage borrowers.

This review is now underway, and the Central Bank is working with the banks to conduct a comprehensive examination of customer mortgage accounts with regard to tracker rates, including any instances where banks may have failed to deliver on their obligations to customers. Such instances may include cases where the bank was not sufficiently clear with customers on their terms and conditions, or where they have failed to honour contractual commitments.

The Central Bank has laid out a detailed and rigorous process for each institution to follow. The identification of affected customers, implementation of any appropriate rectification actions, as well as the calculation of any appropriate interest redress or compensation, are all processes currently being worked through by the banks. The review also involves oversight of each bank's work by an independent third party, and the establishment of an independent appeals process. Further, the Central Bank continues to review and monitor each institution's progress at every stage. It is possible that different banks will progress through the review process at different speeds.

I expect that the Central Bank, and each of the institutions involved, will provide information periodically on steps taken and progress made. The tracker mortgage review is an ongoing process involving the banks, their regulator and any affected customers; I have no direct role in its implementation. It is therefore not possible, nor appropriate, for me to speculate at this time on the number of customers that may be affected.

For completeness, I have requested a brief update from each of the banks in which the State is a shareholder:

AIB

"AIB is conducting a comprehensive review of customer mortgage accounts with regard to tracker rates. This process is ongoing. AIB s review has found the bank fell short on its obligations to some customers. In order to prevent further detriment for the customers identified to date, AIB has in the first instance begun correcting interest rates on these accounts and writing to customers to outline their new interest rates and repayment amounts. As the review progresses, AIB is commencing refunds to customers who overpaid interest and is paying compensation. Details of a set payment towards the cost of independent professional advice will also be made available to customers and the bank will establish an independent appeals process. An independent third party, KPMG, is reviewing key aspects of AIB s work. These steps are in line with the principles outlined by the Central Bank. The overall review will take some time to complete and other customers may be identified through this ongoing process. AIB has put in place a customer Freephone Helpline, 1800 235 460 (Mon-Fri, 8:00am-7:00pm), to assist with any queries its customers may have."

PTSB

"As part of its response to the Central Bank initiated review of Tracker Mortgages in all Irish banks, Permanent TSB is reviewing all Tracker Mortgages issued by the bank.  This review is comprehensive and complex and we are not currently in a position to state with certainty when the matter will conclude.

Separately in July 2015 Permanent TSB concluded an investigation into certain specific identified issues in respect of Tracker Mortgages. This review identified d 1,372 cases where customers had lost an entitlement to a tracker mortgage through a failure at the bank. The bank has written to all impacted customers to offer redress including compensation for this failure. To date over 90% of impacted customers have accepted this redress and compensation. Customers have various options to challenge the amount of redress / compensation offered whether by availing of specific independent appeal panels established for this purpose or by bringing a case to the Financial Services Ombudsman (FSO) or by initiating court proceedings. 

As of 28 October last, 194 (14%) of impacted customers have lodged an appeal with the independent appeals panels while 1,178 (86%) have not. The bank does not have complete information on how many customers may/have lodged an appeal with either the FSO or the Courts."

BOI

"In 2015 the Central Bank of Ireland announced that it would conduct a Tracker Mortgage Examination with all lenders in Ireland. This examination is underway, and Bank of Ireland is co-operating fully with it."

Question No. 162 answered with Question No. 157.
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