Charlie McCreevy (Kildare North, Fianna Fail)
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There is no cap on the aggregate value of special tax reliefs which can be claimed by an individual. However, as the Deputy may be aware, in budget 1998 I announced, as and from 3 December 1997, that an annual cap of €31,750 would apply on the amount of capital allowances that an individual taxpayer could claim against non-rental income in regard to capital expenditure incurred on certain industrial buildings. Any unrelieved capital allowances can be carried forward for offset against the individual's rental income. Industrial buildings such as factories, docks, hotels, etc. are affected by this provision as well as buildings under the area based schemes such the urban, rural, town renewal schemes and a range of other schemes such as multi-storey car parks, private hospitals, etc. There is also a cap of €31,750 on the annual amount that can be claimed by individual investors under the business expansion scheme and as well as cap of €31,750 on the maximum annual amount that can be invested in a qualifying film under the scheme of relief for investment in films. In the case of the latter scheme, this is further restricted as only 80% of total investment is eligible for relief under the scheme.

In my response to the Dáil debate on Second Stage of the Finance Bill, I referred to the fact that the special reliefs provide undoubted economic and social benefits. On the other hand, they narrow the tax base, have a cost, and inevitably are used by high earners to reduce their tax bill. A judgment must be made as to whether the advantages outweigh the disadvantages. It is my view that imposing an overall cap on the aggregate value of special tax reliefs which can be claimed by an individual would undermine the effectiveness of many incentive schemes in providing the economic and social benefits referred to above.