Written Answers Nos. 193-215
193. Deputy Matt Carthy asked the Minister for Finance if he has considered changing favoured successor rules with regard to agricultural relief capital acquisition tax; and if he will make a statement on the matter. [48074/21]
Amharc ar fhreagraWith regard to favoured successor rules in the Capital Acquisitions Tax (CAT) regime, the Deputy should note that there is already a Favourite Nephew/Niece relief in place which allows a nephew or niece to be treated as a child for CAT purposes, subject to certain conditions. This means that they are entitled to the Group A tax-free threshold of €335,000.
The aim of this relief is to target a nephew/niece who worked for the aunt/uncle over a 5-year period prior to inheritance for a minimum number of hours per week, putting their labour and expertise at the disposal of the aunt/uncle and making a sustained contribution to the business before inheritance.
When combined with CAT Agricultural Relief, this relief is intended to support the intergenerational transfer of a family farm and is particularly important in circumstances where a farmer may not have had a direct descendant (e.g. child) to whom they may bequeath the family farm.
I believe that extending the relief to allow for the nomination of a ‘Favourite Successor Relief’ would represent a significant departure from the current CAT regime, as well as a departure from the policy rationale of the Favourite Nephew/Niece Relief.
This would most likely be followed by pressure to extend this to other reliefs (e.g. business), or more broadly for disponers to seek to nominate a ‘Favourite Successor’ for their estate.
Such a fundamental departure from the current CAT regime would lead to an erosion of the revenue base. For example, this could result in a beneficiary currently categorised as a “Stranger in blood” (Group C threshold €16,250) being entitled to the same threshold as a child of the disponer (Group A threshold €335,000).
I have no plans to change the favoured successor rules at this time.
194. Deputy Matt Carthy asked the Minister for Finance his proposals with regard to ensuring that those availing of agricultural relief capital acquisition tax are active farmers; and if he will make a statement on the matter. [48075/21]
Amharc ar fhreagraSection 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for agricultural relief which takes the form of a 90% reduction in the taxable value of gifted or inherited agricultural property. To qualify for the relief, the person taking the gift or inheritance (the “beneficiary”) of the agricultural property must first qualify as a “farmer”, as defined in section 89 CATCA 2003.
The definition of farmer in the legislation requires that at least 80% of the gross market value of the property to which a person is beneficially entitled in possession consists of agricultural property. In addition, following an amendment made to section 89 by Finance Act 2014, the beneficiary (or a lessee where the beneficiary leases the agricultural land) must actively farm the agricultural land on a commercial basis for at least half of his or her normal working time for a period of at least 6 years after receiving the gift or inheritance. Failure to actively farm all (or part) of the agricultural land during the 6-year qualifying period will result in a full (or partial) clawback of the relief.
The ‘active farmer’ requirement was introduced in 2014 to ensure that agricultural relief was, and is, more effectively targeted at individuals that inherit or are gifted agricultural property and actively farm it themselves on a commercial basis (or lease it on a long-term basis to active farmers), thereby ensuring the productive use of agricultural property. The requirement to actively farm the land is, therefore, already a fundamental requirement to qualify for, and to retain, agricultural relief.
As with most taxes, capital acquisitions tax operates on a self-assessment basis, subject to Revenue compliance checks and audit. I am informed by the Revenue Commissioners that, where Revenue identifies arrangements that are not in accordance with the relevant legislative requirements to qualify for a relief, it takes appropriate corrective action.
Revenue has published on its website detailed guidance on the operation of agricultural relief, which is available at: www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part11.pdf
195. Deputy Matt Carthy asked the Minister for Finance the number of persons that availed of enhanced stock relief for farm partnerships in each of the years 2016 to 2020 and to date in 2021; the amount availed of in €1,000 bands; the amount these farm partnerships paid in excess of €15,000 in €1,000 bands; and if he will make a statement on the matter. [48079/21]
Amharc ar fhreagra204. Deputy Matt Carthy asked the Minister for Finance if he has considered extending enhanced stock relief for farm partnerships; and if he will make a statement on the matter. [48089/21]
Amharc ar fhreagraI propose to take Questions Nos. 195 and 204 together.
I am advised by Revenue that data in relation to enhanced stock relief for registered farm partnerships are available on the Revenue website at
www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf.
The following table contains details on the tax years 2016 up to 2018, the latest year for which returns are currently available.
|
- |
2018 |
2017 |
2016 |
|
No. of participants |
210 |
370 |
360 |
|
Cost (€m) |
0.3 |
0.6 |
0.5 |
I am further advised by Revenue that due to the small numbers of taxpayers involved and the obligation to protect taxpayer confidentiality, it is not possible for Revenue to provide the detailed breakdown by amount as requested by the Deputy.
This measure is due to sunset on 31 December 2021. As the Deputy will appreciate, matters concerning the introduction of new reliefs and the extension of existing reliefs fall to be considered by me in the context of the annual Budget and the subsequent Finance Bill. That process is underway.
196. Deputy Matt Carthy asked the Minister for Finance the estimated cost of extending the succession tax credit to off-farm income on the basis of tax returns in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48080/21]
Amharc ar fhreagra197. Deputy Matt Carthy asked the Minister for Finance the number of persons that availed of the succession tax credit in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48081/21]
Amharc ar fhreagra198. Deputy Matt Carthy asked the Minister for Finance the percentage of farm assets that a transfer or must agree to transfer to the successor for the successor to avail of the succession tax credit; and if he will make a statement on the matter. [48082/21]
Amharc ar fhreagraI propose to take Questions Nos. 196 to 198, inclusive, together.
The succession farm partnership scheme is a joint initiative between my Department and the Department of Agriculture, Food and the Marine, designed to encourage an older farmer to form a partnership with a young trained farmer, with a view to transferring management of the farm and ultimately ownership of the farm. The use of a partnership model, rather than an upfront outright sale, allows for the transfer of knowledge from the older farmer to the younger farmer in advance of the transfer of ownership of the land.
The primary participant in a registered farm partnership should apply to the Minister for Agriculture, Food and the Marine to enter the partnership on the register of succession farm partnerships. To be entered on the register of succession farm partnerships, a registered farm partnership must comply with certain conditions.
Firstly, in relation to the estimated cost of extending the succession tax credit to off-farm income, I am advised by Revenue that this tax credit may already be offset against a taxpayer’s overall tax liability.
Further, I am advised by Revenue that the annual costs of the tax credit for succession farm partnerships are available on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf. The tax credit came into operation in 2017 and the latest year for which data are available is 2018.
The following table sets out the numbers of participants and the associated Exchequer cost for 2018 and 2017:
|
- |
2018 |
2017 |
|
No. of participants |
290 |
175 |
|
Cost (€m) |
0.6 |
0.4 |
Finally, one of the conditions of the scheme is that the farmer must enter into an agreement to transfer at least 80% of the farm assets to which the farm partnership applies to the successor (or successors) at some point in the period beginning 3 years after and ending 10 years from the date on which the application to enter the partnership on the register is made. The terms of the agreement must include the farm assets of the farm partnership on the day the application is made, the year in which the proposed transfer will take place, any conditions to which the transfer or sale will be subject, and any other terms agreed between the farmer and the successor (or successors).
For the year of assessment in which the partnership is registered as a succession farm partnership and the four years of assessment immediately following that, each partner will be entitled to a succession tax credit of the lesser amount of:
- €5,000 per year of assessment divided between the partners in accordance with their profit-sharing ratio, and
- the assessable profits arising to the partner from the succession farm partnership.
212. Deputy Pa Daly asked the Minister for Finance the monthly number of automatic renewals of licence renewals to date in 2021, in tabular form. [48106/21]
Amharc ar fhreagra213. Deputy Pa Daly asked the Minister for Finance the monthly number of automatic renewals of off-licence renewals to date in 2021, in tabular form. [48107/21]
Amharc ar fhreagraI propose to take Questions Nos. 212 and 213 together.
The licensing year for Intoxicating Liquor Licences runs from 1 October to 30 September in respect of Liquor Retailer On Licences, Liquor Retailer Off Licences and Liquor Manufacturers Licences. The licensing year for Liquor Wholesale Dealer Licences runs from 1 July to 30 June. Where both a Retailer Off Licence and a Wholesale Dealer Licence are held together, the licensing year for both runs from 1 July to 30 June. Licence renewals for each category fall due on the dates above therefore the issue of renewal figures per month does not arise.
The renewal process for Intoxicating Liquor Licences is not an automatic process and requires licence holders to reapply to Revenue and pay the licence fee at the start of each new licensing period. Revenue can only renew the licence where the applicant holds a tax clearance certificate and can provide any other supporting documentation requested. For example, a certificate of incorporation or a certificate of registration of the business name. For first time applications or where a licence has lapsed, the applicant must produce a Court certificate before Revenue can issue a new licence.
Table 1 sets out the number of liquor licences renewed in 2021 (year to date) for all liquor licence categories. Table 2 sets out the different types of Retailer Off Licences renewed in 2021 (year to date) and Table 3 sets out Retailer Off Licences held with Wholesale Dealer Licences renewed in 2021 (year to date).
Table 1 – Liquor Licences issued in 2021 YTD
|
Liquor Licence Categories |
2021 |
|
Retailer On Licences |
1,062 |
|
Retailer Off Licences |
178 |
|
Wholesale Dealers with Off Licences |
36 |
|
Wholesale Dealer Licences |
498 |
|
Manufacturers Licences |
16 |
|
Totals |
1,790 |
Table 2 – Retailer Off Licences by licence type issued in 2021 YTD
|
Liquor - Retailer Off Licences |
2021 |
|
Beer & Wine Retailer Off |
2 |
|
Beer Retailer Off |
0 |
|
Cider Retailer Off |
0 |
|
Producer's Retailer Off |
2 |
|
Spirit & Beer Retailer Off |
4 |
|
Spirit & Wine Retailer Off |
0 |
|
Spirit Retailer Off |
1 |
|
Spirit, Beer & Wine Retailer Off |
78 |
|
Wine Retailer Off |
91 |
|
Totals |
178 |
Table 3 -Retailer Off Licences held with Wholesale Dealer Licences renewed in 2021 YTD
|
Wholesale Dealers with Off Licences |
2021 |
|
Wholesaler Dealer in Beer & Wine Retailer's Off Licence |
8 |
|
Wholesaler Dealer in Beer & Wine, & Wine Retailer's Off Licence |
1 |
|
Wholesaler Dealer in Beer, Retailer of Spirits, Beer & Wine Off Licence |
12 |
|
Wholesaler Dealer in Beer, Wine & Spirits, & Beer & Wine Retailer's Off Licence |
7 |
|
Wholesaler Dealer in Beer, Wine & Spirits, & Beer, Wine & Spirits Retailer's Off Licence |
1 |
|
Wholesaler Dealer in Spirits & Wine, & Spirits Beer & Wine Retailer's Off Licence |
1 |
|
Wholesaler Dealer in Spirits, Beer & Wine, & Wine Retailer's Off Licence |
1 |
|
Wholesaler Dealer in Wine & Wine Retailer’s Off Licence |
5 |
|
Totals |
36 |
214. Deputy Ged Nash asked the Minister for Finance the status of his plan for a broad ranging review of the banking sector announced in Dáil Éireann in July 2021; when he will publish the terms of reference of such a review; if his Department has had engagement with the Central Bank on this matter since the initiative was announced; and if he will make a statement on the matter. [48157/21]
Amharc ar fhreagraAs the Deputy is aware, I announced in Dáil Éireann on 1 July 2021 that my Department will undertake a broad-ranging review of the retail banking sector to look at, inter alia, expectations of the sector, competition, consumer protection and consumer choice, the sector’s key role in the provision of sustainable credit to the economy, the availability of credit to SMEs from both banks and non-banks and options to further develop the mortgage market.
The review will also look at the cost of doing business for the sector, including impacts on its sustainability and the forces for change at play or foreseen, be they related, for example, to COVID-19, Brexit, climate change, housing, regulation or technology.
I am currently considering the Terms of Reference and will bring a Memo for Information to Government in the coming weeks in advance of their publication.
This process will involve engagement with a wide range of stakeholders, including the Central Bank of Ireland, to develop a fuller analysis of future banking challenges.
215. Deputy Colm Burke asked the Minister for Finance the extent to which his Department and the Department of Health are engaging at a European level to ensure reform of tobacco taxes across the EU including lobbying for equal tax treatment for reduced risks products and traditional cigarettes in view of the expected publication of the updated Tobacco Directive by the European Commission in 2021; and if he will make a statement on the matter. [48204/21]
Amharc ar fhreagraThe taxation of tobacco products is governed by the Tobacco Products Tax Directive 2011/64/EU. The Directive aims at ensuring the proper functioning of the internal market and, at the same time, seeks to promote a high level of health protection and to fight against tax fraud, tax evasion and illegal cross border shopping.
The upcoming review of the EU Directive is set to include a revision of EU minima taxation rates, the introduction of harmonised taxation rates, legislation on cross-border purchasing and product regulation, among other issues. The Department has so far engaged with preliminary work undertaken on behalf of the European Commission, regarding minimum rates and harmonised tax regimes for novel products. It is likely that work on updating the EU Directive will begin in the coming months.
Domestically, the Programme for Government outlined plans to introduce a targeted taxation regime to specifically discourage ‘vaping’ and e-cigarettes. The Healthy Ireland Strategic Plan 2021-2025 also cites the exploration of taxation regimes in relation to novel tobacco products and electronic cigarettes as part of the revision of the EU Tobacco Products Directive as an implementation action. Both the Department of Finance and the Department of Health are of the view that tax policy in relation to novel products such as e-cigarettes and heated tobacco products may be best addressed in the context of the revision to the Tobacco Products Tax EU Directive. The introduction of a harmonised taxation rate for novel products at EU level would be welcomed as the current taxation regimes for novel products vary greatly between EU Member State.
