Seán Sherlock (Cork East, Labour)
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Question 164: To ask the Minister for Finance if married persons over the age of 65 years with one income are tax exempt; the limit for 2009; and if he will make a statement on the matter. [7567/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The position is that an annual exemption from income tax applies for 2009 in respect of those married persons aged 65 years and over whose total income does not exceed €40,000. This limit can be increased by an additional €575 for the first and second dependent child and €830 for each subsequent dependent child. I should point out that where a married couple's income rises slightly above the exemption limits they can be taxed under the marginal relief system. Under this system the exemption limits continue to be applied and the couple is taxed at 40% on all income above the exemption limit until their level of income is such that it would be more favourable to be taxed under the normal tax system of credits and bands.

Brian Hayes (Dublin South West, Fine Gael)
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Question 165: To ask the Minister for Finance the amount of tax revenue that has been forgone by the decision to abolish tax on transactions of contracts for difference since 2006; and if he will make a statement on the matter. [7622/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A contract for difference (CFD) is a form of derivative instrument that enables an investor to take a position on a share in a company and its likely performance (either a rise or fall in share value) without owning the shares. A CFD in itself does not attract a stamp duty liability and it was never the case that it did. A purchaser of a CFD does not buy the shares and therefore he or she is not liable for stamp duty. The seller of the CFD is exposed to a risk that the price for the share concerned will move. To hedge this risk, the seller of the CFD purchases the share itself.

It is not the case that stamp duty on transactions related to CFDs was abolished in 2006. Up to that year, financial institutions relied on the application of either market maker or broker/dealer relief to ensure that a stamp duty charge on shares purchased in connection with a CFD did not arise. In March 2006, Revenue issued a clarification note which stated that, in its view, these reliefs did not apply to shares bought to hedge CFD exposure. This clarification notice was subsequently withdrawn and the Finance Act 2007 introduced the new intermediary relief, which ensured that the purchase of shares to hedge a CFD would not attract stamp duty.

Following the announcement by my predecessor of a review of the law as it relates to stamp duty on share transactions underpinning CFDs and the withdrawal of the Revenue clarification notice, Revenue accepted that, given the likelihood of that business transferring to non-Irish shares, it was unlikely that there would be any real loss of stamp duty arising from allowing market maker relief or broker/dealer relief to be claimed in a CFD-related share purchase. There is no reason to assume this position changed with the introduction of intermediary relief. Indeed, the yield from stamp duty on share transfers rose from €406 million in 2006 to €608.7 million in 2007, although it decreased to €419.4 million in the following year, reflecting the overall decline in share transactions in the current global economic downturn.