Mary Upton (Dublin South Central, Labour)
Link to this: Individually | In context

Question 151: To ask the Minister for Finance if the demand for payment of capital gains tax by a person (details supplied) in Dublin 8 will be reviewed. [16094/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

A charge to capital gains tax arises in respect of chargeable gains accruing on the disposal of assets. Such gains are computed in accordance with the provisions of the Capital Gains Tax Acts. The charge extends to individuals, companies and unincorporated bodies of persons. Capital gains tax has no connection with income, which is the basis for income tax. There is no provision in the Capital Gains Tax Acts to exempt individuals whose sole income arises from disability allowance. Gains arising on the shareholdings of such taxpayers are liable to capital gains tax in the same manner as gains arising to other individuals. Shares in the company concerned, First Active, were chargeable assets. The gain realised on their sale for cash is a chargeable gain in the hands of the shareholder.

I have been advised by the Revenue Commissioners that, as many shareholders would not ordinarily be expected to be familiar with capital gains tax provisions, they decided to write to each of them to inform them of a potential tax liability arising from the disposal of the shares and how to make such a payment. They have further advised me that the taxpayer in question received such a letter which set out an estimate of the amount of capital gains tax due. The taxpayer has made the relevant payment to the Revenue Commissioners, which equates to a total of €359.80 from a total of €3,069 received from the sale of the shares. Her capital gains tax liability was calculated on the basis of the cash she received, which amounted to €3,069. Her allowable costs were nil because the shares were acquired at no cost, so her chargeable gain was €3,069. When her personal exemption of €1,270 was deducted, her net chargeable gain was €1,799. She was charged 20% of that, which amounted to €359.80.

The Revenue Commissioners have informed me that they do not intend to review the payment which has been made in the circumstances I have outlined. However, one's chargeable gain can be reduced by any allowable losses arising in 2004, along with any unused allowable losses following the disposal of assets chargeable to capital gains tax in any previous year. The documentation that has been issued to the person in question mentions that a special Revenue Commissioners helpline number is available if further assistance is required.

Jimmy Deenihan (Kerry North, Fine Gael)
Link to this: Individually | In context

Question 152: To ask the Minister for Finance the reason sight testing advice regarding the use of spectacles and the supply and repair of spectacles do not qualify as medical expenses against which tax relief may be claimed, particularly for persons whose jobs necessitate long hours spent working on computers and whose employers do not provide either free or cost-reduced sight testing; if he has plans to change this; and if he will make a statement on the matter. [16128/05]

Jimmy Deenihan (Kerry North, Fine Gael)
Link to this: Individually | In context

Question 153: To ask the Minister for Finance if the provision and maintenance of contact lenses qualify as a medical expense against which tax relief may be claimed; and if he will make a statement on the matter. [16129/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 152 and 153 together.

Under section 469 of the Taxes Consolidation Act 1997, income tax relief at a taxpayer's marginal rate is available for health expenses incurred by a person on his or her behalf, or on behalf of his or her spouse and dependants. Expenses incurred in respect of routine ophthalmic treatment are explicitly excluded from the relief, however. That has been the case since the relief was introduced in 1967 because health expenses relief, which incorporates an annual de minimis amount, is broadly intended to provide assistance through the tax system in respect of significant or exceptional health expenses, but not those of a routine or more minor nature. Routine ophthalmic treatment means sight testing, advice about the use of spectacles or contact lenses and the provision and repairing of spectacles or contact lenses. I have been informed by the Revenue Commissioners that the inclusion of such items would cost an estimated €16 million per annum.

I have no plans to broaden the terms of the health expenses relief scheme. However, employees who make contributions to the pay related social insurance fund and satisfy the contribution criteria are entitled to treatment benefit, including dental, optical and hearing aid benefit, from the social insurance fund. An insured individual's entitlements under the optical benefit scheme include a free spectacle sight test, a fixed contribution towards an eye examination for contact lenses, free glasses if frames covered by the scheme are selected or a fixed contribution towards the cost of glasses if frames other than the type covered are selected, replacement lenses for existing frames and a contribution towards the cost of contact lenses.

With regard to the details supplied by the Deputy, I understand that the Revenue Commissioners will amend immediately the information on the Internet version of their information leaflet IT6 and the health expenses claim form Med 1 to make it clear that, as is the case with spectacles, the provision and maintenance of contact lenses do not qualify for tax relief. The printed versions will be amended at the next available opportunity.

Ned O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context

Question 156: To ask the Minister for Finance the reason a person (details supplied) in County Cork is now subject to payment of income tax; and if, in view of the demand for payment of tax, this person has been issued with tax credits. [16232/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I have been informed by the Revenue Commissioners that a statement of amended liability for 2003 will issue soon to the person in question, showing a nil liability to tax.