Results 3,661-3,680 of 49,836 for speaker:Stephen Donnelly
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Therefore, what the vulture funds are being advised is to take their existing loan books of, say, 10,000 mortgages, package them up into a residential mortgage-backed securities and list the . That will take approximately two weeks. A company in Luxembourg will then buy such a security and, because it is a section 110 vehicle and exempt from the new provisions, the profits deriving from...
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Banks, obviously, can securitise loans but they do not tend to do it through section 110. There is no reason an Irish bank securitising Irish mortgages should be availing of section 110. That would suggest it is involved in tax avoidance in which it should not be involved.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: The reason behind section 110 was to provide for international securitisation. For example, Boeing builds planes. Airlines do not want to buy planes but they need to use them. There is an aggregator that allows planes to be bought by means of international investment money and then these plans can be rented out to airlines. Section 110 allows for this. The thinking in 1997 was that...
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: None of the things to which the Minister of State referred cannot be done through a normal asset management company. There are alternatives to section 110. Any asset management company can do what the Minister of State just described. The reason to apply section 110 is to avoid tax. That is all section 110 does. It just makes the company exempt from paying taxes.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Sorry?
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: It can also be done without using section 110. Section 110 vehicles only exist in Ireland but banks all over the world do what the Minister of State is speaking about. The tax-free box that is a section 110 vehicle does not exist in the US, France or Germany. It exists here as a global securitisation play because there needed to be an aggregator that could bring profits into the country...
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: That is what it was intended for but it is now obviously not being used in that way. Let us narrow this down. My concern, and what the funds are being told, is that they will be able to take a package of 10,000 home mortgages, turn them into a security, list that security and, therefore, avoid the new provisions. Can the Minister of State explain why they will not be able to that?
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: It will not be possible?
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: As a policy position then, the Government is saying that it would not allow a vulture fund to securitise its loans and keep them-----
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: We are all trying to achieve the same thing. Absolutely.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Therefore, at least the policy position is that vulture funds should not be allowed gather up their mortgages, securitise them and, therefore, avail of this exemption in the amendment.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: I understand that. To be specific in the context of what we are discussing, the Government is not looking for them to be able to securitise and avoid tax?
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Brilliant. I thank the Minister of State. I also thank the Acting Chairman for his indulgence. This segues in to the next section but, as the Minister of State indicated, they are linked, so this is not getting into the Irish real estate funds, IREF, section. I might just mention this to the Minister of State and we can pick it up in the IREF section. The final tax...
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: An investment undertaking.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Yes.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Specific to the vulture funds, the section 110 companies, let us come back to the withholding tax on the investment undertaking. We are probably agreed that any IREF that holds its asset for five years will not pay CGT.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: They hold their assets for at least five years.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: If a company buys a hotel for €20 million and it sells that hotel for €40 million two or ten years later, it does pay CGT on the €20 million capital gain. There is capital gain on property right now. If the Minister or I bought an apartment for €100,000 and sold it for €200,000, we would pay capital gains tax on the gain.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: Yes.
- Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)
Stephen Donnelly: I thank the Minister.