Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank the Deputies for their questions. On Deputy Burton's comments, we did speak about this on Committee Stage and about the work put in by the Revenue Commissioners in trying to calculate the yield in extra revenue to the State from these two changes. The figure of €50 million is based on the potential profits made on the sample of mortgages that were valued at approximately €1 billion and held by a number of section 110 companies that were examined. The results of the examination were then extrapolated to a potential mortgage population of €20 billion. The key assumptions underlying the figures were that only normal trading deductions were allowable and that interest was charged at the normal third party market rates in calculating the taxable profits, that is, no deduction for pop-up participating notes would be availed of. On Committee Stage we also discussed the possibility of a split of the €50 million figure between the funds and the section 110 companies. This was requested and I asked officials to look into this, but difficulties arise in splitting the figure with regard to the interaction between the two types of structures. There is a potential interaction between section 110 companies and these new structures in IREFs but there is an interaction currently between section 110 companies and other fund structures. Deputy McGrath referred to coming back with definite figures in the future as a result of these taxation changes. There will be a difficulty around that because some of these receipts could come into the general basket of corporation taxation receipts. The Revenue Commissioners will endeavour to provide what figures they can, but they have indicated a difficulty in this regard.

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