Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I will certainly do that and will give members the full information.

Deputy Doherty tabled a series of Committee Stage amendments to this section which were ruled out of order but as he had raised the issues on Second Stage, I was aware of his intention.

I agree with the spirit of his amendments which are mainly concerned with the protection of investors. I would have a high regard for the issue of investor protection. Following an assessment of Deputy Doherty's amendments, I have proposed two specific amendments to section 39 in order to provide additional protection for investors in Irish REITs. Specifically I have proposed the introduction of a debt-equity ratio, limiting the borrowings of a REIT to a maximum of 50% of the value of the assets of the REIT and the introduction of a good asset test whereby a minimum of 75% of REIT assets must be assets of the property rental business. The general concerns in relation to investor protection, as outlined by Deputy Doherty during his Second Stage contributions, were taken into account when drafting the proposed amendments in my name. We have pretty much close agreement on that.

In respect of the differential between taxing the REIT and the interest issue, private investors are not limited in the amounts they can borrow, as there is no legal limitation on the amount they can borrow. However, there is a legal limitation of 50% being imposed on the REITs. It is not an equal situation. We felt we were justified in not imposing the 75% interest rate restriction.

I have dealt with the issue of Irish investors.

On the question of corporation tax on the residue held by the REITs, since it is a property company, there will be expenses in maintaining and upgrading properties and in securing them and all the normal expenses connected to property, so the intention is that the residue in the REITs company would be used for that purpose. Anything that is distributed will be taxed in the hands of the investor.