Michael Noonan (Limerick City, Fine Gael)
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I move amendment No. 46:

In page 83, to delete lines 14 to 19 and substitute the following:
" 'aggregate income', in relation to a company or group, means the aggregate profits of the company or group, as the case may be, as—(a) reduced by the aggregate net gains of the company or group, as the case may be, where aggregate net gains arise, or
(b) increased by the aggregate net losses of the company or group, as the case may be, where aggregate net losses arise;”.

Amendments Nos. 46 to 50, which are grouped together, are largely technical amendments which I propose to make to section 39, which relates to real estate investment trusts, REITs. The introduction of a wholly new tax regime to legislation is a significant undertaking and as is normal several issues have come to light since the publication of the Bill as initiated. The majority of these amendments are wholly technical in nature and are required to give clarity to certain definitions or to ensure that the wording used in the provisions is consistent with other relevant provisions in the Taxes Consolidation Act.

I am also proposing two more substantive amendments, Nos. 51 and 53 to strengthen further the investor protection aspects of the REITs regime. I propose introducing a good acid test to make sure that a minimum of 75% of the REITs assets are assets of the property rental business and a debt equity ratio to limit borrowings with a REIT to 50% of the value of its assets. These changes are prompted by a further review of comparative provisions in REIT regimes worldwide and also by investor protection concerns raised by Deputies on Second Stage.

I will now speak about the details of this group of amendments. These five amendments are being taken together as they are interlinked and all relate to technical amendments which are to be made for the purposes of clarity and to ensure that the provisions operate as intended. The REITs legislation as initiated includes definitions of aggregate income and property income which specify how certain amounts of income net of capital gains are to be calculated. In order to be technically correct it was determined that these definitions should also take account of capital losses. Accordingly, to provide for this clarification I am putting forward for the consideration of the committee the following amendments, No. 46 to amend the definition of aggregate income to include references to the newly defined aggregate net losses, No. 47 to insert a definition of aggregate net losses, No.48 to amend the definition of property income to include reference to the newly defined property net losses, No.50 to insert a definition of property net losses. A further technical correction is being made in amendment No. 49 which corrects a typographical omission to be consistent with the wording used in other related definitions where the revaluation or disposal of investment property is referenced.