Jack Wall (Kildare South, Labour)
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Question 150: To ask the Minister for Finance if individuals who purchased shares in Anglo Irish Bank with loans financed by Anglo Irish Bank itself on a non-recourse basis will be able to write off the loss incurred against future Capital Gains Tax liabilities; if this is the case, if he will introduce some mechanism to prevent this from happening; and if he will make a statement on the matter. [37688/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that loss relief for capital gains tax purposes arises where there is a disposal of an asset for a consideration that is less than its acquisition cost or where an asset has been lost or destroyed or becomes of negligible value. Subject to certain conditions (for example, relief cannot be given more than once in respect of a loss) a capital loss can be carried forward for set-off against future capital gains.

Section 546 of the Taxes Consolidation Act 1997 provides that a loss is computed in the same way as a chargeable gain is computed in regard to Capital Gains Tax. Calculations of chargeable gains or allowable losses under this legislation take no account whatsoever of the financing arrangements (whether non-recourse or not) relating to the asset disposed of, or deemed to be of negligible value, or lost/destroyed, as the case may be.

The question of changing the legislation to disallow or limit the carry forward of losses in circumstances where the asset was financed through non-recourse loans would represent a significant change to our capital gains tax legislation because it would effectively link the taxation of an asset to the loan arrangements for the acquisition of the asset in question. Furthermore, the current symmetry of treatment between losses and gains would be affected. I have no plans at this stage to make a change in this area, but the matter will be kept under review.