Written Answers Nos. 328-350
328. Deputy Ged Nash asked the Minister for Finance the end dates of the terms of office of each of the chief executive officers or equivalent in each of the public bodies or publicly funded bodies under his aegis; if there will be a publicly open competition to fill these roles; and if he will make a statement on the matter. [30584/21]
Amharc ar fhreagraThe following is the situation in relation to the position of Chief Executive Officer and equivalent of public bodies and publicly funded bodies under the aegis of my Department:
The Office of the Comptroller and Auditor General has three Directors of Audit, all of whom are appointed to positions following an open Top Level Appointments Commission (TLAC) competition. The Comptroller and Auditor General appoints one of the three Directors as Secretary to the Office and the Minister for Public Expenditure & Reform appoints that Director as Accounting Officer on foot of a nomination by the Comptroller and Auditor General. The Directors are permanent civil servants, and as such, their term of office ends on retirement, resignation or dismissal.
The term of office of the Governor of the Central Bank of Ireland is due to expire on 31 August 2026. Part III of the Central Bank Act 1942, as amended, outlines that the Governor of the Central Bank is appointed by the President on the nomination of the Government for a period of 7 years which may be extended by a further 7 years. The appointment was made in accordance with the statutory requirements and the Guidelines on Appointments to State Boards issued by the Department of Public Expenditure and Reform and, as such, was advertised publicly on the State Boards website.
The Financial Services and Pensions Ombudsman’s term of office will expire on the 19 April 2023. Section 8 of the Financial Services and Pensions Ombudsman Act 2017 sets out the manner by which the appointment of the Ombudsman can be made, including that the appointment is consequent upon the holding of an open competition in accordance with the Public Service Management (Recruitment and Appointments) Act 2004.
The term of office of the Chief Executive Officer of Home Building Finance Ireland expires on 31 August 2024. An open public recruitment competition is held for the role of CEO.
The term of office of a Member of the Irish Fiscal Advisory Council is four years and a Member may serve up to three consecutive terms of office. The Minister for Finance designates one of the Council Members as Chairperson. The current Chairperson was reappointed as a Member of the Fiscal Council in accordance with the Fiscal Responsibility Act 2012 for a third term effective from 1 January 2021 and continues to serve as Chairperson having been appointed by the Minister to this role on 22 July 2020. This term will expire on 31 December 2024. Member Appointments to the Fiscal Council comply with the Public Appointments Service (PAS) process set out in the Guidelines on Appointments to State Boards and, as such, appointments are filled through a publicly open competition.
The Chairperson of the Irish Financial Services Appeals Tribunal (IFSAT) is serving a second term which is due to end on 14 June 2025. IFSAT is established under Part VIIA and Schedule 5 of the Central Bank Act 1942 as set out in the Central Bank and Financial Services Authority of Ireland Act 2003. The Act provides that a member is eligible for re-appointment, but may not hold office for more than three consecutive terms of 5 years. The Chairperson of IFSAT is appointed by the President on the nomination of the Government for a period of 5 years. The appointment of the current Chairperson, was made in accordance with the statutory requirements and the Guidelines on Appointments to State Boards and, as such, was advertised publicly on the State Boards website.
The National Asset Management Agency (NAMA) Chief Executive Officer was appointed by the Minister for Finance in December 2009 in accordance with Section 37 of the NAMA Act 2009. The lifespan of NAMA was always envisaged to be relatively limited and as NAMA is currently in the process of an orderly wind down, the CEO’s term will conclude when this is completed.
The contract of the Chief Executive of the National Asset Treasury Agency (NTMA) expires on 30 June 2022. The NTMA will operate an open public recruitment competition for this role in due course.
The Office of the Revenue Commissioners has three Commissioner Positions. It has advised that the end date of the term of office for the Chairperson of the Board is 2 February 2022. The end dates of the terms of the other two Commissioners are 2 February 2022 and 6 February 2025. Each term is for a period of seven years. The Commissioner posts are Secretary General Positions and are filled by an open TLAC competition, the Minister for Finance appoints one of the Commissioners as Chairman.
The term of the Acting Chief Executive of the Strategic Banking Corporation Ireland (SBCI) will expire on 31 August 2021. Following a recent public recruitment competition, a new Chief Executive will take up their position on 1 September 2021 for a term of five years.
The Chairperson of the Tax Appeals Commission (TAC) was appointed on 1 July 2020. Appeals Commissioners (including the Chairperson) serve seven year terms as per the provisions of the Finance (Tax Appeals) Act 2015. Appeals Commissioners can serve a second term if the Minister for Finance decides to reappoint them. Commissioners cannot serve more than two terms (fourteen years total). Accordingly, the Chairpersons term will end on 30 June 2027. When a vacancy arises at Commissioner level (including the Chairperson), the Public Appointment Service (PAS) will run an open competition.
329. Deputy Emer Higgins asked the Minister for Finance his views on the application of the 5% VAT rate on all period products here (details supplied); if Ireland is maximising the use of the lower VAT rate; the details of submissions made by Ireland in relation to the VAT review; if the submission included period products; and his position in relation to same. [30622/21]
Amharc ar fhreagraAs the Deputy may be aware, Ireland is the only country in the EU which applies a zero rate of VAT to the vast majority of period products. This was the rate that applied in 1991 and we have been able to maintain that rate under the provisions of the EU VAT Directive that allow for a zero rate to be maintained if it applied on and from 1 January 1991. Period products with a zero rate of VAT include sanitary towels (including maternity pads), panty liners and sanitary tampons
From 1 January 2021, following the last Finance Bill, a reduced VAT rate of 13.5% has applied to menstrual cups, menstrual pants and menstrual sponges.
I can confirm that Ireland and a number of other Member States are looking for greater flexibility in the VAT directive to allow a zero rate to be applied to these newer period products. These discussions are connected to a wider debate on VAT Rates and any agreement on VAT rates must be agreed by every Member State.
330. Deputy Cormac Devlin asked the Minister for Finance the VAT rate and arrangements for counsellors and psychotherapists; and if he will make a statement on the matter. [30636/21]
Amharc ar fhreagraThe VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. Under domestic legislation, professional medical care services recognised as such by the Department of Health are exempt from VAT. Professional medical care services recognised by the Department of Health are generally those medical care services supplied by health professionals who are enrolled, registered, regulated, or designated on the appropriate statutory register provided for under the relevant legislation in force in the State or equivalent legislation applicable in other countries. This includes health professionals registered under the Medical Practitioners Act 2007, the Nurses Act 1985 and those engaged in a regulated profession designated under Section 4 of the Health and Social Care Professionals Act 2005.
Statutory Instrument No. 170 of 2018 (Health and Social Care Professionals Act 2005 Regulations 2018) of 2 July 2018 designates psychotherapists and counsellors as a regulated profession and established the Counsellors and Psychotherapists Registration Board. Professional counselling and psychotherapy services provided by persons registered by this Board are exempt from VAT from the date of their registration.
As you may be aware, the then Minister for Health, Simon Harris TD, appointed the thirteen members of the Counsellors and Psychotherapists Registration Board with effect from 25 February 2019.
The Board has begun the substantial body of work which must be undertaken before it is in a position to open its registers. Questions on the establishment of the Counsellors and Psychotherapists Registration Board and their progress in opening their register are a matter for the Minister for Health.
331. Deputy Patrick Costello asked the Minister for Finance the number of claims for a benefit under the Israel-Ireland double taxation agreement in each of the past five years; the number that required further investigation; the number that were rejected; the number that were rejected in particular due to the fact that the company, person or income to be taxed was based in illegally occupied territories to which the treaty does not apply; and if he will make a statement on the matter. [30658/21]
Amharc ar fhreagraThe provisions of the Double Taxation Treaty between Ireland and Israel apply to persons, including companies, who are resident of either Contracting State or both as defined by the Treaty. Benefits under the Treaty are only extended by one State to a resident of the other State and with respect to income arising in either State. Persons not so resident and sources of income not from within either State do not qualify for Treaty benefits.
I am informed by Revenue that all double taxation treaty reliefs or benefits must be in accordance the terms of the relevant Treaty and the Taxes Consolidation Act.
|
Year |
Number of claims |
Rejected |
|
14/06/2016 - 31/12/2016 |
<10 |
<10 |
|
01/01/2017 - 31/12/2017 |
<10 |
0 |
|
01/01/2018 - 31/12/2018 |
18 |
<10 |
|
01/01/2019 - 31/12/2019 |
265 |
<10 |
|
01/01/2020 - 31/12/2020 |
300 |
26 |
|
01/01/2021 - 09/06/2021 |
102 |
<10 |
|
Total |
697 |
40 |
Accordingly, Revenue examines all claims, having regard to relevant supporting information, and where it has reason to reject a claim it does. Where a claim examined by a Revenue Officer does not have sufficient information, documentation, or the appropriate certification from the tax authority of the State of residence of the claimant, it will be rejected and no further investigation is required in such instances.
The total number of claims made pursuant to a benefit of the Ireland-Israel Double Taxation Treaty over the last five years was 697. The total number that were rejected over the same period was 40. No claim was rejected because it related to the occupied territories and the breakdown of the other information for each of the past five years is set out in the table below.
Due to Revenue’s obligation to protect the confidentiality of taxpayer information and in line with Revenue’s statistical disclosure protocol, where there are less than ten cases in a category these are indicated as “<10”.
332. Deputy Aengus Ó Snodaigh asked the Minister for Finance further to Parliamentary Question No. 211 of 17 April 2018, if he has sought the alteration of the EU VAT Directive to allow for the removal of VAT charges on the rental of disability aids especially during an interim period in cases in which a disabled person is awaiting the delivery or installation of a purchased disability aid which are exempted from VAT. [30676/21]
Amharc ar fhreagraI am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply.
The EU VAT Directive provides for particular categories of goods and services where a Member State may apply a lower rate or exemption from VAT. Under Irish legislation, the supply of a range of medical equipment and appliances – which include invalid carriages (excluding mechanically propelled road vehicles), orthopedic appliances, deaf aids, walking frames and crutches – falls within one of these categories and is subject to the zero rate of VAT. In addition, the Value-Added Tax (Refund of Tax) (No. 15) Order, 1981, provides in certain circumstances for the refund of VAT on goods which are aids or appliances and includes goods specially constructed or adapted for use that are purchased for the exclusive use of a person with a disability of a type specified for the purposes of the Order.
In accordance with the Directive, the supply of the rental of a disability aid is considered to be a service of hiring and is liable to VAT at the standard rate, currently 23%. There is no provision under the Directive to permit the removal of the application of VAT to the service of hiring, so consequently the change sought by the Deputy is not possible.
333. Deputy Richard Boyd Barrett asked the Minister for Finance the reason uncompleted houses (details supplied) would not be sold individually by NAMA to persons who are willing to complete the necessary work to make these houses habitable for their own use given that there are other houses in the estate that are completed with occupants who have a water connection and in view of the lack of housing; and if he will make a statement on the matter. [30703/21]
Amharc ar fhreagraAs Minister for Finance I have no role in respect of NAMA’s commercial operations. The Deputy will be aware that NAMA does not typically own or sell property, rather NAMA owns loans for which the properties act as security. I am advised that the properties to which the Deputy refers are controlled by an appointed Receiver, who has responsibility for the management and sale of such properties.
I am advised that the partially completed units referenced cannot currently be completed in full compliance with planning due to Irish Water capacity issues with the local waste water treatment plant and an incomplete foul sewer network. Accordingly, the units are not currently fit for occupation and suggestions that individuals could address the waste water issues themselves may result in serious health and safety problems. The Receiver hopes that Irish Water will allocate resources to resolve the matter but this may take some time. NAMA is not aware of the specific arrangements of other units in this development, which are not secured to NAMA’s loans, have in relation to waste water and disposal of foul effluent.
NAMA has a dedicated email address for general queries and representations from Oireachtas members: oir@nama.ie. This email is monitored regularly and queries responded to promptly, while observing the statutory obligations relating to debtor confidentiality.
334. Deputy Eoin Ó Broin asked the Minister for Finance the amount of revenue that was collected through the sale of dogs in each year for the past five years. [30710/21]
Amharc ar fhreagra339. Deputy Eoin Ó Broin asked the Minister for Finance the number of dog breeding establishments with tax registration numbers. [30809/21]
Amharc ar fhreagra340. Deputy Eoin Ó Broin asked the Minister for Finance the estimated amount of revenue lost through the black market sale of dogs. [30810/21]
Amharc ar fhreagraI propose to take Questions Nos. 334, 339 and 340 together.
I am advised that Revenue uses a European standard classification system, known as ‘NACE’ to categorise the economic activities or sectors of taxpayers. In the NACE system, dog breeding or dog selling are not separately categorised. In addition, these types of operations are often part of wider economic activities undertaken by taxpayers and it is therefore not possible for Revenue to identify or report on the registrations or tax paid specifically by dog sales or dog breeding.
I am further advised that all economic activities, including animal breeding, are included in Revenue’s risk intervention programmes. Under these programmes, cases are risk-ranked, drawing on a wide range of data sources including details provided directly by taxpayers and information received from third party sources. The level of risk identified in any case determines the intervention to be undertaken, ranging from assurance checks to tax audits and investigations with a view to criminal prosecution in the most egregious cases.
In addition, Revenue’s Customs teams play a vital role in supporting the DSPCA, the ISPCA and other animal welfare groups in the detection of illegal puppy exports from Irish Ports and have achieved significant successes in this regard.
335. Deputy Darren O'Rourke asked the Minister for Finance if funding will be provided for the purchase of two additional backscatter vans for the Revenue Commissioners. [30724/21]
Amharc ar fhreagraI am advised by Revenue that it has no plans to purchase additional backscatter vans and that the current deployment of 1 such van and 3 mobile container scanners meets its operational needs.
However, the requirement is kept under continuous review, having regard to ongoing risk evaluation and evolving operational needs.
336. Deputy Catherine Murphy asked the Minister for Finance if he has engaged with the United States Secretary of the Treasury since their appointment; and if so, the nature of those engagements. [30741/21]
Amharc ar fhreagraOn her appointment to Secretary of the US Treasury in the new Biden Administration, I wrote a letter of congratulations to Janet Yellen. Subsequently, and in my capacity as President of the Eurogroup, I participated in a number of virtual meetings of G7 Finance Ministers and Central Bank Governors, in which Secretary Yellen and Jerome Powell, Chair of the Federal Reserve, also participated.
My first bilateral meeting with Secretary Yellen took place by video call on 17 March, as part of my St Patrick's Day programme of virtual US engagements, where we had a good exchange of views on supporting the economic recovery from the Covid crisis. Most recently I met with Secretary Yellen in person in London at the G7 Finance meeting, which I also attended in my capacity as President of the Eurogroup. We discussed the economic aspects of the agenda, including the ongoing discussions at the OECD on reforms to the international tax rules to address the challenges of digitalisation and globalisation.
I look forward to further opportunities to speak with Secretary Yellen in the near future about our shared challenges and opportunities.
337. Deputy Colm Burke asked the Minister for Finance if additional supports will be provided to small traders who rely on imports from outside the EU in view of the decision to apply VAT on items imported from outside the EU valued under €22 from 1 July 2021; and if he will make a statement on the matter. [30763/21]
Amharc ar fhreagraAs the Deputy will be aware, at present, if your goods have a customs value (including cost, transport, insurance and handling charges) of €22 or less, you will not have to pay VAT . However this limit applies to the whole consignment, not just one item. Any businesses relying on imports from outside the EU would only be affected by the upcoming change in cases where a consignment they received had a monetary value of less than €22. In addition, by charging VAT on all items imported from outside the EU from 1 July small businesses are better placed to compete against online retailers based outside of the EU.
341. Deputy Carol Nolan asked the Minister for Finance the details of the expenditure incurred by staff in his Department under the heading of travel and subsistence from 1 January 2020 to date; and if he will make a statement on the matter. [30865/21]
Amharc ar fhreagraI can inform the Deputy that the expenditure incurred by my Department on travel and subsistence from 1 January 2020 to date was €325,520
The provision of this expenditure is used to cover the costs incurred by Officers, the Minister and Minister of State of the Department while on Departmental business. This may include:
- Involvement in EU activities generally, including ECOFIN Councils
- World Bank and International Monetary Fund work
- Other miscellaneous travel
- Provision of Ministerial Drivers
- Ministerial international engagements and greater international engagement at EU level and generally with respect to Brexit, Financial Services IFS 2020 Strategy, and promoting Ireland as a destination for related Foreign Direct Investment
- The undertaking of our strategic target to enhance engagement with external stakeholders and improve our influence with relevant Ministries/international institutions/potential investors/rating agencies
342. Deputy Carol Nolan asked the Minister for Finance the details of each value for money and policy review conducted by his Department from 1 January 2019 to date; if external costs were incurred; if so, the details of such costs; and if he will make a statement on the matter. [30882/21]
Amharc ar fhreagraMy department has carried out the following value for money and policy reviews from 1 January 2019 to date:
- Interdepartmental Review of Local Property Tax – March 2019 , no external costs.
- Review of the Special Assignee Relief Programme (SARP) 2019. Carried out by Indecon. Cost: €107,010 (inclusive of VAT).
- 2019 Report on the Revised Entrepreneur Relief Scheme. Carried out by Indecon, Cost - €104,119.50 (inclusive of VAT)
- Review of stamp duty Consanguinity Relief 2020, no external costs.
- Review of Residential Development (stamp duty) Refund Scheme 2020, no external costs.
- Review of stamp duty Farm Consolidation Relief 2020, no external costs
- Review of the Accelerated Capital Allowance scheme for Energy Efficient Equipment , no external costs.
- Ireland’s Corporation Tax Roadmap January 2021 Update, no external costs.
- The “Evaluation of Concept of Community Banking in Ireland” was prepared by Indecon International Economic Consultants and published by the Minister on 19 December 2019. € 133,393.50 was paid for this independent report in January 2020.
- A policy review on moneylending is ongoing and no costs have been incurred in respect of this to date.
- The Social Finance Foundation commissioned research into Unlicensed Moneylenders and the Department, through its membership of the Personal Micro Credit (PMC) Task Force, contributed (€5,000) to a portion of the funding required for this research. This is independent research which feeds into the overall policy considerations in the area.
- Draft records management policy review – October 2019 – Arcline Records Management Services - €307.50 (VAT incl.).
* Note: It is considered that TSG papers or tax expenditure reports do not come within scope of the PQ.
343. Deputy Brendan Griffin asked the Minister for Finance if clarification will be provided on a matter (details supplied) in relation to increasing the local property tax on holiday homes; and if he will make a statement on the matter. [30925/21]
Amharc ar fhreagraSubject to a limited number of exemptions Local Property Tax (LPT) applies to all residential properties. It is sufficient for a property to be liable if it is suitable for use as a residence even if it is not actually occupied as such. The LPT charge is based on the market value of a property on a specified date known as the valuation date. I am informed by Revenue that LPT returns require owners to indicate whether their properties are principal or non-principal primary residences (NPPR). However, the information does not distinguish whether NPPR properties are used as holiday homes or otherwise.
The Deputy will be aware that the Government recently approved the General Scheme of the Finance (Local Property Tax) (Amendment) Bill 2021 which has been published. The Bill is being drafted to give effect to a package of measures addressing the Programme for Government commitments and related matters. The proposed amendments do not include any changes in respect of holiday homes and I have no plans to introduce a higher rate of LPT for holiday homes.
344. Deputy Rose Conway-Walsh asked the Minister for Finance the annual cost to the Exchequer of the research and development tax credit; and if he will make a statement on the matter. [30984/21]
Amharc ar fhreagra345. Deputy Rose Conway-Walsh asked the Minister for Finance the percentage of the qualifying research and development activity that is eligible to count towards the research and development tax credit that is carried out in the State; the percentage that is carried out elsewhere in the European Economic Area; and if he will make a statement on the matter. [30985/21]
Amharc ar fhreagra346. Deputy Rose Conway-Walsh asked the Minister for Finance if regional and development activities carried out in Northern Ireland is eligible to count towards the research and development tax credit; and if he will make a statement on the matter. [30986/21]
Amharc ar fhreagraI propose to take Questions Nos. 344, 345 and 346 together.
The research and development (R&D) tax credit allows a company to claim a 25% tax credit in respect of expenditure incurred on qualifying R&D activities. In making a claim for the R&D tax credit, companies must satisfy two tests: the activity must be a qualifying activity (a science test); and the amount of the claim must be based on R&D expenditure incurred (an accounting test).
To qualify for the R&D tax credit, a company must be within the charge to corporation tax in the State and must undertake qualifying R&D activities within the European Economic Area (EEA) or the UK and, in the case of an Irish tax resident company, the expenditure must not qualify for a deduction for the purposes of tax in another territory.
As tax returns do not include information in respect of the location of the research and development activity, the information requested by the Deputy in this regard cannot be provided.
The definition of qualifying R&D activities requires that a claimant company engage in a systematic, investigative or experimental activity which seeks to achieve a scientific or technological advancement in a field of science of technology and involves the resolution of scientific or technological uncertainty.
Should an Irish company incur qualifying R&D expenditure on a regional or development activity in Northern Ireland, it may qualify for the R&D tax credit providing the expenditure does not qualify for a deduction for the purposes of tax in another territory. It is also important to note that, where expenditure is met directly or indirectly by grant assistance from any state or other body, the expenditure will not be considered as having been incurred by the relevant company and therefore would not qualify for the R&D credit.
In respect of the cost, I am advised by Revenue that the latest information in respect of the tax cost of the research and development tax credit is available at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx .
The year 2019 is the most recent year for which comprehensive data on the credit are available. Information in respect of 2020 will be published in 2022 when the corporation tax returns for that year, due for filing up to the end of September 2021, have been analysed.
347. Deputy Rose Conway-Walsh asked the Minister for Finance the annual cost to the Exchequer of the knowledge development box; and if he will make a statement on the matter. [30987/21]
Amharc ar fhreagraThe most recent data on the annual cost and the number of claimants of the Knowledge Development Box (KDB) for the years 2018 and 2019 are published on page 17 of Revenue’s paper on 2020 Corporation Tax payments and 2019 Corporation Tax returns. This information is available at www.revenue.ie/en/corporate/documents/research/ct-analysis-2021.pdf.
In this regard, the Deputy may be aware that a claimant company has a period of up to 24 months to make a claim for KDB relief. Therefore, more claims in respect of the year ended 31 December 2019 may be made by September 2021.
I am further advised that, due to the small number of KDB claims and Revenue’s obligation to protect the confidentiality of taxpayer data, it is not possible to provide information in respect of the size of the firms availing of the relief.
349. Deputy Michael McNamara asked the Minister for Finance further to Parliamentary Question No. 95 of 2 June 2021, if he will address an issue in which a person (details supplied) in County Clare cannot get access to a copy of their own data from a bank for the relevant period from 1 March 2020 to 3 August 2020; and if he will make a statement on the matter. [31084/21]
Amharc ar fhreagraI can confirm for the Deputy that the answer I gave to Parliamentary Question No. 95 stands and which I will reiterate for his benefit.
As Minister for Finance, I have no role in how any bank manages its dealings with its customers, including those in which the State has a shareholding. Such matters are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis.
The independence of banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. Accordingly, it would not be appropriate for me to intervene on behalf of an individual customer.
The person who has contacted you may wish to make an appeal to the Financial Services and Pensions Ombudsman (FSPO) to have the matter independently investigated. It should be noted that the FSPO will only accept an appeal when an individual has first gone through their bank’s own appeals’ process.
350. Deputy Dara Calleary asked the Minister for Finance if he will give consideration to the reintroduction of capital gains tax exemptions in certain circumstances (details supplied); his views on whether such a scheme would benefit rural economies and assist such persons to meet financial implications of medical and care needs; and if he will make a statement on the matter. [31087/21]
Amharc ar fhreagraA number of reliefs from CGT are already in existence that are available to farmers.
Farm Restructuring Relief
Relief from CGT is available where an individual disposes of or exchanges farmland in order to consolidate an existing holding. To qualify for the relief, the first sale or purchase must occur between 1 January 2013 and 31 December 2022. The next sale or purchase must occur within 24 months of the first sale or purchase. Following an ex-post review of this relief, the relief, which was due to expire on 31 December 2019, was extended to 31 December 2022 as part of Finance Act 2019.
Retirement Relief
Business or farming assets are relieved from CGT where the person disposing of the asset(s) is aged 55 or over and both owned and used the asset(s) for the ten years prior to the disposal. While this relief is commonly referred to as Retirement Relief, it is not necessary to retire from the business or farming in order to qualify.
The operation of the relief differs between the disposal of a business or farm to a child and disposals to anyone other than to a child. The operation of the relief also differs between persons aged 55 to 65 years and persons aged 66 years and over.
From 1 January 2014 if the person is between 55 and 65 years of age and the disposal is to a child, the full relief may be claimed. If the person is 66 years of age or older the relief is restricted to €3 million.
If the child disposes of the asset within 6 years, the relief will be withdrawn and they must pay the full amount of CGT on the original disposal and the subsequent disposal.
In the case of a disposal of a business or a farm to someone other than a child, the full relief may be claimed when the market value at the time of disposal does not exceed a threshold of €750,000 if the person is under 66 years of age. The threshold is €500,000 if the person is 66 years of age and older.
These thresholds are lifetime limits and if they are exceeded the relief is withdrawn and CGT is payable on the gains on all disposals. Marginal relief may apply to gains that exceed the thresholds limiting CGT to half of the difference between the sale price or market value and the threshold.
Revised CGT Entrepreneur Relief
The revised CGT entrepreneur relief applies to an individual who disposes of qualifying assets, including shares in a qualifying company. Gains on such disposals are charged to CGT at the rate of 10%, subject to a lifetime limit of €1m.
For the relief to apply, the assets must be used for the purposes of a qualifying business carried on by the individual or the individual must own a shareholding of at least 5% in a company carrying on a qualifying business. A qualifying business is a business other than the holding of securities or other assets as investments, the holding of development land or the development orletting of land. Business assets must have been owned by the individual for a continuous period of at least 3 years in the 5-year period immediately prior to the disposal. Where the individual disposes of shares in a qualifying company, they must have held the shares for a continuous period of 3 years at any time prior to the disposal. Agricultural assets used in a qualifying business may be considered qualifying assets for the purposes of revised entrepreneur relief.
Transfer of a site to a child
An exemption from CGT is available on the transfer of a site by a parent (or both parents simultaneously) to their child and the spouse or civil partner of that child to build a house which is the child’s only or main residence. For the purposes of this exemption, a transfer includes a joint transfer by an individual, and their spouse or civil partner, to their child. The area of the site must not exceed 1 acre and the value of the site must not exceed €500,000.
All taxes are subject to ongoing review, which involves the consideration and assessment of the rate and the relevant reliefs and exemptions. Tax policy and legislation is reviewed by the Tax Strategy Group (TSG), as part of the annual Budget and Finance Bill process, and is considered in the wider tax policy context.
