Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I am keeping to the substance of it because in terms of the Minister's amendments, much of it is taken in good faith in terms of his officials in the Department working in conjunction with Revenue. They have done as much as they can to close loopholes but there are two sides to this game and we have not yet seen the other side's play. That is why it is crucial that we have a report on the effectiveness of this amendment within six months so that we are informed prior to the next Finance Bill and if it requires tweaking before that, so be it. We will come to that when we reach that point in terms of amendment No. 99.

A welcome aspect of section 110 is that the idea of mark to market is gone. William Fry states that section 110 companies being able to revalue their assets at mark to market is now gone and it makes the rules retrospective. It states:

... will potentially result in different tax treatments for a Section 110 Company depending on which of the available accounting elections it previously made for tax purposes. Some Section 110 Companies will be subject to the new rules in respect of unrecognised accounting gains that have accrued pre 6 September 2016 despite the fact that the increase in value in the assets may have occurred prior to the change in law.

Depending on whether it decided to account for fair value or book value, this will either apply or not apply to it. Clearly it will apply to everybody but in terms of the increase in value of the assets, if they have been applying a fair value then they have been recognising for accounting purposes the increase in the value each year. If they have been applying a book value they have not, therefore, the mark to market change affects those individuals.

Will the Minister of State address that? Is there anything within this section that allows section 110 companies in any way to revalue their assets in their balance sheets prior to section 21 kicking in?