Written Answers Nos. 338-354
338. Deputy Brendan Griffin asked the Minister for Finance if inheritance tax thresholds for childless couples (details supplied) will be increased in budget 2023; and if he will make a statement on the matter. [42403/22]
Amharc ar fhreagraAs the Deputy is aware, for Capital Acquisitions Tax (CAT) purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.
The Group A threshold (currently €335,000) applies, inter alia, where the beneficiary is a child (including adopted child, stepchild and certain foster children) of the disponer. The Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant such as a grandchild of the disponer. The Group C threshold (currently €16,250) applies in all other cases.
Any prior gift or inheritance received by a beneficiary since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any tax is payable on a benefit. Where a person receives gifts or inheritances that are in excess of his or her relevant tax-free threshold, CAT at a rate of 33% applies on the excess benefit.
While a disponer may have no natural children, any stepchildren, adopted children or certain foster children can avail of the Group A threshold in respect of gifts and inheritances received from that disponer.
In addition, nieces or nephews of that disponer may qualify for favourite niece or favourite nephew relief in respect of gifts or inheritances of business assets. The relief allows a niece or nephew who qualifies for the relief to avail of the Group A threshold. Qualifying nieces or nephews are those who have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer.
For the nephew or niece to be deemed to be working substantially on a full-time basis in the business he or she must work:
- more than 24 hours per week at the place where the business, trade or profession is carried on; or
- more than 15 hours per week at the place where the business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer and the nephew or niece.
The options available for providing increases to CAT thresholds are considered in the context of available resources as part of the annual budgetary process and like all matters need to be balanced against competing demands.
339. Deputy Darren O'Rourke asked the Minister for Finance the total value of VRT relief provided for electric vehicles in each of the value ranges in 2021, in tabular form (details supplied); and if he will make a statement on the matter. [42425/22]
Amharc ar fhreagraI am informed by Revenue that VRT relief of up to €5,000 per vehicle is available for Electric Vehicles whose open market selling price (OMSP) does not exceed €50,000. The amount of VRT relief provided in 2021 in respect of electric vehicles falling in each of the value ranges specified by the Deputy is set out in the table below.
|
Value Range |
VRT Relief in 2021 €m |
|
<= €20,000 |
€0.2m |
|
€20,001-€30,000 |
€0.1m |
|
€30,001-€40,000 |
€7.3m |
|
€40,001-€50,000 |
€9.9m |
|
€50,001-€60,000 |
€0.0m |
|
>€60,001 |
€0.0m |
340. Deputy Colm Burke asked the Minister for Finance if consideration will be given to increasing the group C and group B capital acquisition tax inheritance tax thresholds to support those whose next of kin are not their own children and ensure a higher tax-free threshold applies to these inheritances; and if he will make a statement on the matter. [42433/22]
Amharc ar fhreagraFor capital acquisitions tax (CAT) purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise. Any prior gift or inheritance received by a beneficiary since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any tax is payable on a benefit. Where a person receives gifts or inheritances that are in excess of the relevant Group threshold, CAT at a rate of 33% applies on the excess. There are three Group thresholds:
- the Group A threshold (currently €335,000) applies, inter alia, where the beneficiary is a child (including adopted child, stepchild and certain foster children) of the disponer;
- the Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant of the disponer;
- the Group C threshold (currently €16,250) applies in all other cases.
The Group thresholds do not apply to gifts and inheritances between spouses / civil partners, which are exempt from CAT.
Accordingly, where a person gives an inheritance to a person who was his or her next of kin, but that person was not their child (including adopted child, stepchild and certain foster children), spouse or civil partner, either the Group B threshold of €32,500 or the Group C threshold of €16,250 will apply. CAT will be payable by the beneficiary at a rate of 33%, to the extent that the benefit received, when aggregated with any prior gift or inheritance received since 5 December 1991, exceeds the applicable Group threshold.
However, where a person leaves the family home to his or her next of kin, the beneficiary may be in a position to avail of the dwelling house exemption. To qualify for the exemption, the inherited property must have been the deceased person’s principal private residence at the date of death. This requirement is relaxed in situations where the deceased person left the property before the date of death due to ill health; for example, to live in a nursing home. The beneficiary must also have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the house for 6 years after that date. In addition, the beneficiary must not have a beneficial interest in any other residential property. Detailed guidance on the dwelling house exemption is available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part24.pdf.
Where the beneficiary was the disponer’s niece or nephew, the niece or nephew may qualify for ‘favourite’ niece or favourite nephew relief in respect of gifts or inheritances of business assets. The relief allows a niece or nephew who qualifies for the relief to avail of the Group A threshold. Qualifying nieces or nephews are those who have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer. For the nephew or niece to be deemed to be working substantially on a full-time basis in the business he or she must work:
- more than 24 hours per week at the place where the business, trade or profession is carried on; or
- more than 15 hours per week at the place where the business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer and the nephew or niece.
Furthermore, changes to the CAT group thresholds come at a cost to the exchequer. Recent Revenue estimates indicate that the cost of increasing the Group B and Group C thresholds, to align with the Group A threshold, would be €221m and €70m respectively.
341. Deputy Colm Burke asked the Minister for Finance if the regulation that limits agricultural relief on capital acquisitions tax to land where solar panels constitute less than 50% of the holding will be removed in order that there will be no restriction in this regard; if land and holdings that constitute up to 100% will qualify, in order to assist in meeting Ireland’s renewable targets; and if he will make a statement on the matter. [42434/22]
Amharc ar fhreagraPrior to Finance Act 2017, agricultural land which was leased for solar panels was not classified as qualifying agricultural property for the purposes of Capital Gains Tax retirement relief or agricultural relief from Capital Acquisitions Tax.
Following a review announced in Budget 2018, and in recognition of the then Government's commitment to facilitate the development of solar energy projects in Ireland, a revised approach was introduced whereby it is now possible for land leased for the installation of solar panels to be classified as qualifying agricultural property under certain conditions. A key condition is that the total area of land under lease and on which solar panels are installed does not exceed 50% of the total area of agricultural land.
While introducing this amendment, it was important that we did not lose sight of the fundamental principle which underpins our policy in relation to agricultural relief and retirement relief.
I recognise that allowing land leased for solar panels to be classified as qualifying agricultural property is an important element in encouraging solar energy projects. However, this must also be carefully balanced with the overarching objectives of this valuable relief which aims to encourage the inter-generational transfer of agricultural land which is being actively farmed.
Department of Finance officials have recently engaged directly with officials from Department of Agriculture, Department of Energy, Climate and Communications and Revenue in consideration of this matter, as well as other solar energy policy measures, in a broader government context.
342. Deputy Louise O'Reilly asked the Minister for Finance the way victims of credit card fraud that has affected their credit rating can have their credit rating rectified. [42508/22]
Amharc ar fhreagraWhere a fraud has been perpetrated against a credit card holder, the matter should be reported to An Garda Síochána and the credit card issuer, with a view to cancelling the credit card and seeking reversal of any fraudulent charges.
In relation to 'credit ratings', the Central Credit Register (CCR), which is established by the Central Bank under the Credit Reporting Act 2013 (the Act), holds information on loans and this information is used to provide credit reports to borrowers and lenders. However, it should be noted that the CCR does not produce credit ratings or credit scores.
All borrowers, including credit card holders, have four key rights under the Act, which they may exercise at any time:
1. The right to request a credit report, free of charge subject to fair usage.
2. The right to place an Explanatory Statement of up to 200 words on their credit report.
3. The right to request to have information on their credit report amended if they believe it to be incorrect, incomplete or not up to date.
4. The right to place a Notice of Suspected Impersonation on their credit report if they believe they are, have been, or are about to be, impersonated by another.
Information on how a person may exercise any of these rights can be found on the CCR website (centralcreditregister.ie).
More generally, the Deputy may wish to note that Citizens Information and the Consumer and Competition Protection Commission have published material on their respective websites that may be helpful for consumers such as :
"How to avoid scams" (Citizens Information) and
"Disputed card transactions (chargeback)" (CCPC).
343. Deputy Patricia Ryan asked the Minister for Finance if he will abolish the universal social charge for persons on modest private pensions; and if he will make a statement on the matter. [42512/22]
Amharc ar fhreagraThe Universal Social Charge (USC) was designed and incorporated into the Irish taxation system in 2011 to replace two other charges, namely the Health and Income Levies. Its primary purpose was to widen the tax base and to provide a steady income to the Exchequer to provide funding for public services.
The USC is an individualised tax, meaning that a person’s liability to the tax is determined on the basis of his/her own individual income and personal circumstances. The USC is applied at a low rate on a wide base, which ensures that it is a stable and sustainable source of revenue for the State.
It is important to point out that the USC does not apply to social welfare payments, such as the contributory and non-contributory State Pensions. In addition, currently individuals with incomes of less than €13,000 are exempt from USC, which can include modest occupational pensions. Therefore, an individual in receipt of a contributory State Pension and an occupational pension of €13,000 can have a total income of just under €26,200 per annum and incur no USC liability. For 2022, it is estimated that 28 per cent or 797,600 of all taxpayer units will be exempt from USC.
Furthermore, I would point out that in recent Budgets, including Budget 2022, this Government actively increased the USC ceiling for the 2 per cent rate to ensure low income earners would not be subject to the top rates of USC.
Ireland has one of the most progressive personal income tax systems in the world, which plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. In my view, a broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the most fair and sustainable income tax system in the long term. As such, I have no plans to narrow the USC base.
344. Deputy Patricia Ryan asked the Minister for Finance if it is open to local authorities to issue municipal bonds; and if he will make a statement on the matter. [42513/22]
Amharc ar fhreagraAny consideration of allowing local authorities to issue municipal bonds gives rise to the wider concern of the need for government to manage General Government deficits, expenditure and debt. All the financial transactions of local authorities feed into the calculation of the general government balance and general government debt. Thus, any expenditure and receipts of a local authority will impact on the general government deficit. Any debt liabilities to the private sector and/or International Financial Institutions (such as the European Investment Bank) will increase general government debt.
Local government is part of the wider government system and any additional borrowing by them adds to the overall stock of borrowing. The sustainability of this level of debt needs to be taken into account when considering whether to allow local authorities to issue municipal bonds. Public debt in Ireland now amounts to nearly a quarter of a trillion euros. My Department issued its annual publication on the sustainability of public debt in February 2022. The key message that flows from that analysis is that the increase in public debt is manageable but in order not to impinge on our living standards, it must be managed in a careful and prudent way.
If external borrowing by an entity, such as a local authority, cannot be repaid it is almost certain that the Exchequer will have to fund the cost of such borrowing. There is always the risk that local authorities could borrow to the extent that they did not have the capacity to repay such borrowing or that the repayment of the interest or principal related to such borrowing could undermine the provision of local services.
It is not obvious that there is the level of financial and operational controls at local or national level, the financial capability to manage such borrowing or indeed the existence of a market for borrowing by local authorities in which they could attract interest from external investors without some form of Government guarantee.
Without appropriate strategies, policy and indeed legal requirements to manage these processes there would also be concern as to the use of debt by local authorities. If local authorities are to borrow to fund investment then there is a need for that borrowing to be matched by a revenue stream in order to repay the cost of any such borrowing. Borrowing could not be used to run day to day services or to cover any deficits in existing funding arrangements.
The National Treasury Management Agency (NTMA) is solely responsible for borrowing on behalf of the Government and managing the National Debt in order to ensure liquidity for the Exchequer and to optimise the interest burden over the medium term. The primary source of Government borrowing is through the sale of Irish Government bonds. The proceeds of borrowing must be paid into the Central Fund unless there is specific statutory authority to do otherwise. It is not likely that local authorities in Ireland could borrow at the same rate; for the same level and on the same conditions as has been achieved by the NTMA.
Tax and other revenues, together with the proceeds of Exchequer borrowing are available to fund general Exchequer expenditure – including in the areas of housing, roads, and infrastructure. Local Authorities already have the capability to raise revenue in their local areas e.g. through Rates and the Local Property Tax (LPT) which links local expenditure with local accountability for such expenditure.
345. Deputy Ged Nash asked the Minister for Finance the number of complaints that have been received by the Financial Services and Pensions Ombudsman pertaining to the exit of banks (details supplied) to date, by month and by bank, in tabular form; the number of additional staff the Financial Services and Pensions Ombudsman has hired during this same period; if he satisfied the Ombudsman is adequately resourced and staffed to deal with any potential increase in the volume of complaints as a result of banks exiting the Irish banking sector; and if he will make a statement on the matter. [42549/22]
Amharc ar fhreagraThe Financial Services and Pensions Ombudsman (FSPO) commenced monitoring complaints relating to the withdrawal of financial service providers from the Irish banking market in Q2 2022.
To note, section 56(4) of the Financial Services and Pensions Ombudsman Act 2017 provides that “the Ombudsman, shall, without prejudice to the form of investigation, ensure investigations are conducted otherwise than in public”. As such, it is not possible to identify the specific providers against whom complaints are made.
The details provided below reflect the aggregate number of complaints received by the FSPO as of 31 August 2022, where the withdrawal of providers from the Irish banking market was identified as an element of the conduct being complained of by consumers.
Of the 50 complaints received, 17 have been closed either within the FSPO’s Dispute Resolution Service (5) or as a result of early-stage closure or legal service resolution (12). Of the 33 active complaints on hand, 15 are being processed within the FSPO’s Customer Operations and Information Management team, while the remaining 18 complaints have progressed to the FSPO’s Dispute Resolution Service.
On staffing, 10 staff have joined the FSPO since March 2022. However these staff were recruited in relation to existing vacancies and as such are not additional staff.
The FSPO is mindful that any increase in the volume of complaints received to the Office arising as a result of market withdrawal will have resourcing and budgetary implications for the organisation. The FSPO maintains and puts in place appropriate resourcing to deliver on its remit and monitors its resourcing and Key Performance Indicators against the backdrop of an evolving external financial environment, on an ongoing basis.
As an example, during 2020 and 2021, the FSPO faced and met the significant challenges posed by the COVID-19 pandemic. This included developing and implementing a new Covid-19 complaint management strategy, which was operational within weeks of receiving the first Covid-19 related complaints. By the end of 2021, the FSPO had received 875 complaints arising from the pandemic, with 682 of these complaints concluded by the end of 2021. The FSPO’s complaint management strategy included the prioritisation of complaints concerning business interruption insurance, in recognition of the importance to policy holders of achieving a swift understanding as to whether they were entitled to benefits or payments.
As the FSPO continues to monitor complaint trends arising as a result of the withdrawal of banks from the Irish market, the FSPO may, if deemed necessary, establish specific specialist complaint handling teams or increased resourcing to respond to such complaints. Any additional resource requirements will be kept under review by the FSPO and the Department of Finance, as appropriate.
|
Month received |
Complaints received |
|
March 2022 |
2 |
|
April 2022 |
1 |
|
May 2022 |
8 |
|
June 2022 |
14 |
|
July 2022 |
13 |
|
August 2022 |
12 |
346. Deputy Ivana Bacik asked the Minister for Finance the rationale for imposing a rate of 23% VAT on dog and other domestic pet grooming services given that other veterinary services are taxed at different rates; and if it is intended to harmonise rates for the sector. [42550/22]
Amharc ar fhreagraI can confirm that the position remains as outlined to the Deputy on 30 June 2022 in reply to parliamentary question 128. For convenience the response to that question is set out below.
I 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. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive.
The provision of dog grooming services is not included in Annex III and as such is subject to the standard rate of VAT, currently 23%. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to this service.
The Deputy may be interested to know that by way of special derogation from the general rule, Ireland is permitted to continue its long-standing practice of applying a reduced rate, currently 13.5%, to the supply of services by a veterinary surgeon in the course of their profession, but there are strict restrictions on this derogation, including that the rate cannot be reduced below 12%. However, where a veterinary surgeon carries out a dog grooming services as part of the veterinary procedure, such as treating an illness or disease, the dog grooming is considered part of the veterinary procedure and the entire procedure is liable to VAT at the reduced rate. Where a veterinary surgeon provides a dog grooming service as a supply that is distinct from a veterinary procedure the service is liable to VAT at the standard rate of 23%.
347. Deputy Mairéad Farrell asked the Minister for Finance if the offices of the Revenue Commissioners will reopen to the public for in-person consultations; if so, when they will reopen; and if he will make a statement on the matter. [42573/22]
Amharc ar fhreagraI am advised by Revenue that an in-person appointment service is being provided at the Revenue Information Office at Cathedral Street, Dublin 1. Appointments can be booked by calling the Appointment Helpline on 01 738 3660. It is envisaged that similar services will be provided in Limerick, Cork and Galway, from later this month and consideration will then be given to extending the service to other public offices.
The in-person appointment service is in addition to the existing virtual appointment service being provided which largely reduces the need to visit in-person. Virtual appointments can also be booked through the Appointment Helpline.
Revenue continues to provide a full range of online services for taxpayers to manage their tax affairs, which for the most part removes any requirement to access public offices. These services, which include an online communications channel through the MyEnquiries system, are available 24/7, are easy to use and are fully secure.
For taxpayers who, for a variety of reasons, may not have access to the online services, Revenue provides extensive support across its various telephone helplines and continues to operate a full service for queries being received through the postal system.
348. Deputy Catherine Murphy asked the Minister for Finance the number of instances in which a bank (details supplied) has investigated bank officials across the sector in respect of accessing customer data and information for purposes that were not official and-or valid in the past five years to date in 2022, in tabular form; the number of prosecutions and-or litigations that have arisen from those investigations; if any bank has been fined for breaches of customer privacy; and, if so, the amount that has been realised from those fines. [42574/22]
Amharc ar fhreagraThe Deputy will be aware that the legislative basis providing for the obligation to report such breaches by data controllers is to the Data Protection Commission, which is a body under the aegis of my colleague, the Minister for Justice Ms Helen McEntee TD.
In this case, the Central Bank of Ireland is not in a position to respond on this matter as the Data Protection Commission is the appropriate supervisory authority for regulated entities in respect of data protection matters.
349. Deputy Ged Nash asked the Minister for Finance the estimated cost to the Exchequer of removing stamp duty applied to ATM withdrawals; and if he will make a statement on the matter. [42577/22]
Amharc ar fhreagraI am advised by Revenue that information on stamp duty receipts in respect of ATM cards and Combined Debit/ATM cards is published on the Revenue website at: www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-stamp-duty.aspx.
While the stamp duty receipts in respect of ATM Cards relate solely to ATM transactions, the receipts in respect of Combined Cards include amounts due in respect of both ATM and Debit transactions. As only the aggregate amount due in respect of all transactions on these cards is returned, Revenue does not have the information necessary to provide the individual cost of eliminating the duty on ATM withdrawals.
350. Deputy Ged Nash asked the Minister for Finance the estimated revenue that would be raised by extending the 1% stamp duty on the purchase of shares to all share buy-backs; and if he will make a statement on the matter. [42578/22]
Amharc ar fhreagraI am advised by Revenue that as details of share buy backs are not reported on tax returns, it does not have data on which to base an accurate estimate of the potential annual revenue from extending the scope of this tax as outlined by the Deputy.
351. Deputy Ged Nash asked the Minister for Finance the estimated additional revenue that would be raised from removing the current VAT exemption for private schooling; and if he will make a statement on the matter. [42579/22]
Amharc ar fhreagraI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive, with which Irish VAT law must comply.
A fundamental feature of VAT legislation is that the liability to, or exemption from, VAT depends on the nature of the goods and services being supplied; it does not differ according to the circumstances of a particular supplier including private or public schools.
The VAT Directive obliges Member States to exempt from VAT the provision of children’s or young people’s education in the public interest and, accordingly, Ireland exempts the provision of education. There is no discretion under the Directive for Ireland to remove the provision of education from the exemption.
I am further advised that entities engaged in exempt activities are not required to make a return of the amount of VAT that is not paid as a result of the exemption. Therefore, Revenue does not have any data from which to estimate the amount involved.
352. Deputy Ged Nash asked the Minister for Finance the estimated additional revenue that would be raised from increasing the rate of capital gains tax to 40% for persons earning over €250,000 and €500,000, respectively, in tabular form; and if he will make a statement on the matter. [42580/22]
Amharc ar fhreagraI am advised by Revenue that the estimated additional revenue that would be raised by increasing the rate of Capital Gains Tax to 40% in respect of gains made by persons with incomes in excess of €250,000 and €500,000 respectively is as set out in the table below:
This full-year estimate is based on 2019 data, the latest year for which fully analysed data are available. This estimate assumes no change in behaviour by individuals resulting from the increase in the tax rate.
|
Income |
Estimated Yield €m |
|
Above €250,000 |
22 |
|
Above €500,000 |
11 |
353. Deputy Ged Nash asked the Minister for Finance the estimated additional revenue that would be raised from a 1% surcharge on all taxable income above €250,000, €500,000 and €1 million, respectively, in tabular form; and if he will make a statement on the matter. [42581/22]
Amharc ar fhreagraThe table below sets out the estimated yields to the Exchequer, on a first and full year basis, as prepared by Revenue in respect of the proposals outlined by the Deputy. Please note that the figures are rounded to the nearest €5 million.
|
Scenario |
First Year Yield €m |
Full Year Yield €m |
|
Additional 1% USC surcharge on income above €250,000 |
45 |
60 |
|
Additional 1% USC surcharge on income above €500,000 |
25 |
30 |
|
Additional 1% USC surcharge on income above €1m |
10 |
15 |
354. Deputy Pearse Doherty asked the Minister for Finance if he has considered options to secure cashback without a purchase; if this is possible under current European Union regulations; and if he will make a statement on the matter. [42602/22]
Amharc ar fhreagraThe revised Payment Services Directive (PSD2 - Directive 2366/2015) regulates payment services in Europe. This Directive was transposed into Irish law by the Payment Services Regulations (S. I. 6 of 2018).
Under Article 3(e) of the PSD2, Cash back with a purchase is excluded from the scope of the Directive. However, no such mention is made in PSD2 regarding cash back without a purchase. As such it is not clear whether cash back without a purchase is within the scope of the Directive as it is not explicitly excluded.
A review of PSD2 in currently being undertaken by the European Commission. As part of this review the Commission issued a call for advice to the European Banking Authority (EBA), the matter of cash back without a purchase was discussed and the EBA in their response have called on the European Commission to provide clarity on this issue. The EBA proposed the European Commission clarify the treatment of these services and, in particular, whether they should fall within the scope of an already existing payment service.
Cash back is a frequently used method of cash withdrawal here, a consumer survey conducted as part of my Department's review of the retail banking sector found that, 20% of those surveyed use cash back from a retailer regularly. This placed cashback second, after ATMs at 73%, for most common methods of cash withdrawal.
