I propose to take Questions Nos. 160 to 162, inclusive, together.
The 2006 and 2007 Finance Acts introduced, with effect from 1 January 2007, measures to limit the use of certain tax reliefs and exemptions (known as “specified reliefs”) by high-income individuals who, by means of the cumulative use of various tax incentives, had in previous years the potential to substantially reduce their tax liabilities. The overall objective is to ensure that, from 2007, individuals with an adjusted income of €500,000 or more (where the full restriction applied) pay an effective rate of Income Tax of approximately 20 per cent on a combination of adjusted income and ring-fenced income. The restriction began to apply where an individual’s adjusted income exceeded €250,000 and the full restriction applied where an individual had adjusted income of €500,000 or more.
The 2010 Finance Act introduced further limitations on the use of specified reliefs, with effect from 1 January 2010. These limitations are designed to ensure that individuals with an adjusted income level of €400,000 or more (where the full restriction applies) pay an effective rate of Income Tax of approximately 30 per cent on a combination of adjusted income and ring-fenced income. In addition, the adjusted income on which the restriction begins to apply was reduced to €125,000.
In relation to the Deputy's question regarding the estimated extra revenue that would be expected to accrue for each reduction in €2,500 until a threshold of €100,000 in the High Earners’ Restriction, I am advised by Revenue that it is not possible to accurately estimate the yield from the proposed change. Taxpayers are not required to submit a form RR1 (which is submitted by taxpayers to provide their calculation of the restriction) unless their adjusted income exceeds €125,000, therefore there is no basis on which to identify those affected by lowering the threshold.
In relation to the Deputy's question regarding the estimated extra revenue that would be expected to accrue for each increase of €5,000 in the maximum reliefs allowed under the High Earners' Restriction, Revenue advise me that increasing the relief threshold amount would result in fewer taxpayers being subject to the restriction. Therefore it is not expected that such a change would result in an additional yield in revenue.
In relation to the Deputy's question regarding the estimated extra revenue that would be expected to accrue for each reduction of 1% in the aggregate of specified reliefs of adjusted income allowed under the high earners’ restriction, I am advised by Revenue that lowering the percentage level of specified reliefs to adjusted income to less than 20% could result in additional cases being subject to the restriction. However, as there is no RR1 return for these cases, they are not readily identifiable and so there is no basis on which to estimate a yield associated with these changes.