Mary White (Fianna Fail) | Oireachtas source

I thank the Minister of State for his attendance. I wish to raise two issues which are dear to my heart. First, the capital gains tax relief regime is not competitive with the UK. The extension of capital gains tax relief is restricted to the first €1 million of gains. By contrast, the UK has a simpler, clearer and more attractive relief which applies a flat 10% rate to entrepreneurial gains of up to £10 million sterling. The £10 million sterling relief has increased threefold since the relief was first introduced. This was done by the British Government because it had a significant brain drain of potential entrepreneurs leaving the country for Australia and other countries. It got its act together and introduced entrepreneurial relief.

A number of other issues arise. An individual may hold shares directly in a company which engaged in a business or may hold shares in a holding company which in turn holds shares in companies engaged in business. The definition of a holding company, as currently drafted, is restrictive compared to the UK regime.Entrepreneurs who are using a holding company structure are unlikely to be able to avail of this relief. The requirement that an entrepreneur is a full-time working director is very restrictive and would exclude entrepreneurs who have an interest in more than one company. There is no full-time requirement in the UK. The restriction that in order to qualify, shares are not listed on official lists of exchanges is an unnecessary limitation on the commercial freedom of a company in respect of whether to list its shares.

The Minister, Deputy Bruton, states constantly that he wants Ireland to be the global centre of start-ups, yet he is letting the Department of Finance dictate the way business is done. I am not being personal about the officials who are here today. The Bill, which is being delivered by officials in the Department of Finance, penalises start-ups. The Department of Enterprise, Jobs and Innovation has let the Department of Finance walk all over it. It is no wonder therefore that we have missed out on a massive business opportunity like the Web Summit. The Government clearly has not communicated or liaised with those who try to develop start-up businesses. Paddy Cosgrave, the founder of the Web Summit, summed up the situation well when he said:

I have absolutely no record of a single Irish Minister ever meeting a single high-level delegate. Last year the British Government sent a Minister here for two days. He didn't look for photo opportunities beside Enterprise Ireland or the equivalent of IDA stands.

Instead, like a good Brit, that Minister spent his time talking to people where he could do business and grow his business in the UK and create employment. There is an incredible gap between Department of Enterprise, Jobs and Innovation officials and those at the Department of Finance. I apologise but I am not being personal, I am just talking as an entrepreneur on behalf of business people. We are not at the races despite all the action plans for jobs, of which we have had more talk today. It is businesses that create jobs. This finance Bill does not go far enough, in contrast to the UK.

The other issue which is dear to my heart is that of inheritance tax. My proposals are as follows: to increase the threshold from the current €225,000 to €500,000, which was the 2008 level; cut the tax from 33% to 20%, the 2000 rate; and give a further 12 months to pay the tax instead of having to raise the money by October in the year of inheritance.

Over 1,000 people, mainly from south Dublin, signed a petition in favour of my proposals. They presented it at the Department of Finance on 30 September. In his Budget Statement, the Minister, Deputy Noonan, recognised there was an issue with inheritance tax, yet his concession of an increase in the threshold from €225,000 to €280,000 can only be described as miserly and minimal. With this so-called concession, the Department of Finance expects to collect even more next year from inheritance tax - a massive €375 million, up €5 million on the expected receipts for this year.

The underlying issue is that the inheritance tax is not taken seriously at Government level. Although in most parts of the country house prices are still low, prices in south County Dublin now average €520,000. That compares with €225,000 in Cork city, €223,000 in Galway city and €144,000 in Limerick city according to the daft.iethird quarterly report. No wonder inheritance tax is not an issue in these other cities. It is a real live issue for families in south County Dublin.