Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I will conclude on this by saying capital gains tax is different from income tax. If the Senator or I happen to have a property that we sell and it is not a principal family residence, we pay capital gains tax of 33%. We might have other income that we pay 20% or 40% tax on, depending on our income. They are two unconnected taxes paid by one individual but one is not added on top of the other. What the Senator has done in her recommendation is the REIT as a company would pay 33% capital gains tax but then the people who get a dividend could not offset that tax the company paid against their tax bill because they are not the same as the company, they are just people receiving a dividend out of the investment. It is a distribution to the investors, who will be taxed at the income tax rate. I do not think too many people who have sufficient funds to invest in this particular type of investment are not earning more than the average industrial wage and paying tax at the top rate. I cannot envisage somebody investing who is not on the top tax rate. If people are not on the top tax rate, they are not on a high income. The Senator can take it as common sense that people who have funds to invest in REITs must have some income behind them, otherwise they would not be investing. They cannot offset the capital gains tax the company paid versus their income tax at more than 40%.

I am looking at the Senator's recommendation again, and in addition to the 33% in paragraph (a) she proposes the introduction of a surcharge on REITs. She wants a 33% tax to be paid by the company and now she wants a surcharge but does not specify the rate, and this is on top of the 40% the people will pay when they get their dividend. I have nothing further to add.