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Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: I do not recall referencing a particular person in any of the comments I have made.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: In regard to the OECD, the officials worked to published guidance from the OECD in regard to how these amendments might best be structured to ensure they achieve their intended purpose. Obviously, the publication of the amendment in September in so far as section 110 is concerned led to a number of representations being made not only on the section 110 issue but on section 122 and what we...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: During our discussion on section 21, we had a lengthy discussion on how the amount of €50 million was arrived at. The Department took the view that a conservative figure should be provided for because, as expenditure would be based off the back of it, that was the prudent thing to do. We also discussed ways we could provide more detail around that figure and in regard to sections 21...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: I read into the record a detailed note from Revenue on how it calculated that figure, including the extrapolations it made in arriving at €50 million and the reason that figure was ultimately included. I did say that it was a conservative figure but it was prudent to be conservative in this regard. If between now and Report Stage we can provide a better understanding of the breakdown...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: My understanding is that there are 96 funds holding Irish property assets worth circa €10 billion. That information was provided by the Central Bank. We can request that the Central Bank disclose the identity of the 96 entities concerned. In terms of who we are seeking to capture in the context of section 22, these are players who have built up a large portfolio, the number of which...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: On that point, any representation made is available under FOI. I will speak to the Minister, Deputy Noonan, about how those representations might be made available to the committee rather than it having to seek them through the FOI process. I would not characterise what happened as a negotiation from the point at which I was involved. This issue was brought to our attention and it was one...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: We are not introducing any new exemptions by way of these amendments but we are continuing exemptions that already exist, as would be standard practice in so far as a charity might be concerned. There is nothing new being done that would provide for any type of avoidance.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: I cannot comment on the Clerys case.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: I will step out for a couple of minutes and be right back in.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: Any way in which the profits might be extricated from the fund will be a chargeable event as far as tax is concerned.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: Yes, as well as the sale of units.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: That is the end-point because it is paid by the fund to Revenue. There is no claim made against it.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: That is the new tax coming in, yes.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: No. I have a more detailed note on a taxable event for an IREF if it would be helpful to read that into the record.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: I will speak to the Deputy's final point first. That fear might stem from the original drafting of the amendment, which is not in the final draft. They will not be affected in the way that fear was expressed to the Deputy. It is not the case with the text of the amendment that we are debating today. The Deputy is absolutely right when it comes to a stable investment environment. That...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: I apologise for interrupting the Deputy's earlier intervention.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: The Deputy has tabled an amendment on 20% as opposed to 90%. Regarding what we are achieving with the 20%, we need to remember the marginal rate of tax in the 1980s was 65%. The 80% tax introduced that was introduced by the National Asset Management Agency Act 2009 was on windfall gains, not normal gains. We have never had an income tax rate close to the rate suggested in the amendment and...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: That is my understanding, but an investor would not avoid being liable to tax on that new investment. That liability would come when the distribution was made.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: For an Irish investor, a deemed distribution occurs every eight years and the individual pays tax at that point.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance Bill 2016: Committee Stage (Resumed) (15 Nov 2016)

Eoghan Murphy: Most property funds, particularly the property funds we are talking about, are operating with investors who are expecting a nearer-term return, rather than holding on to the assets indefinitely and growing the funds for an indefinite period, because they are very highly leveraged. This is what they are trying to do. The purpose of it is to make a nearer-term redemption than what might be a...