Eamon Gilmore (Dún Laoghaire, Labour)
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Question 142: To ask the Minister for Finance if he will confirm, with reference to sections 235, 610 and Schedule 15, Paragraph 37, Taxes Consolidation Act 1997 and sections 105 and 54, Finance Act 2007, which give tax exemptions to sporting bodies which have been approved by the Revenue Commissioners, that a tax exempt sports club may not use a capital sum arising from the disposal of assets or the interest on the investment of such a capital sum, to underwrite day-to-day expenses and operating losses and thereby subsidising members' subscriptions, that the use of such funds as outlined in above would be a breach of the standard income and property clauses under which the tax exemption was granted and that no concession has been granted to any tax exempt sports club for the use of a capital sum or interest arising in the circumstances outlined; and if he will make a statement on the matter. [19198/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that section 235 of the Taxes Consolidation Act (TCA) 1997 gives an income tax exemption to sporting bodies, which have been approved by the Revenue Commissioners on the basis that the body has been established for, and exists for the sole purpose of promoting athletic or amateur games or sports. The exemption extends to the amount of the income of the approved body as has been, or will be, applied to the sole purpose mentioned. This approval may be withdrawn by Revenue.

The exemption from Capital Gains Tax for sporting bodies is contained in sections 610 and Schedule 15, Paragraph 37, TCA 1997. Section 54 of the Finance Act 2007 is an anti-avoidance measure and amends Schedule 15 of the TCA. This ensures that, in order for bodies to qualify for the exemption from Capital Gains Tax, the consideration for the disposal for the purposes of the Capital Gains Tax Acts must be applied for the purposes of the bodies concerned if it is greater than the actual proceeds of the disposal giving rise to the gain. In some cases under the CGT code, market value may be imposed as the consideration, which could be higher than the actual proceeds.

Section 105 of the Finance Act 2007 provides for an exemption from Stamp Duty for the acquisition of land by sporting bodies approved under section 235 of the TCA 1997 where the land acquired will be used for the sole purpose of promoting athletic or amateur games or sports. The exemptions discussed above only extend to the amount of the proceeds arising from the disposal of assets, or the interest on the investment of a capital sum, which has been, or will be, used for the sole purpose of promoting athletic or amateur games or sports.

The administration of the exemptions is a matter for the Revenue Commissioners. I am advised by Revenue Commissioners that the detailed application of funds would have to be considered specifically, and in context, in each individual case, to see if the application of funds has any implications for the tax exemption, or the body's approval status in the context of the body being established, and existing, for the sole purpose of promoting athletic or amateur games or sports.

Revenue has also confirmed that bodies that are granted sporting tax exemption are subject to periodic risk-focused review towards ensuring that the terms of the exemption continue to be fulfilled. All relevant matters, including adherence to any income and property clauses attached to the exemption, are considered in the context of such reviews.