Seán Ardagh (Dublin South Central, Fianna Fail)

I welcome the opportunity to speak on the Finance Bill 2005 and I congratulate the Minister for Finance on his first budget and Finance Bill.

I would like to examine two areas, approved retirement funds and the recoupment of tax by charities. Retirement relief should exist so that people can avoid an impoverished retirement and so that those on a reasonable salary in employment will have the same standard of living after retirement. The retirement benefits relief is not in place, however, to assist with estate planning for wealthy individuals. At the moment, it is being used in that way. Steps should be taken to ensure the approved retirement funds are not used in a way that was not intended when they were introduced.

Section 45 of the Bill allows for interest on loans which companies take out with banks in EU states other than Ireland. That facilitates the purchase by approved retirement funds of property in countries outside Ireland. Section 25 allows section 60 insurance policies, which can be used without capital acquisitions tax being applied, to pay capital acquisitions tax on the approved retirement fund. That is a method by which the very wealthy will reduce their tax bills.

On Sunday, The Sunday Tribune referred to a number of people with incomes of between €5 million and €10 million, much of which goes into pension funds and into approved retirement funds that accumulate such wealth that we cannot conceive the income from them being used for normal retirement expenses. Apart from a small number of people with ostentatious lifestyles, the vast majority of even the very wealthy have a normal lifestyle that would not require the return that approved retirement funds bring about.

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