Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Question 174: To ask the Minister for Finance the value of capital allowances provided to landlords of private residential property and commercial property in each of the past seven years; and the cost to the Exchequer arising from these allowances. [20100/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that on the basis of the claims for capital allowances entered on tax returns filed by non-PAYE taxpayers and companies for the tax years 2002 to 2008 in respect of property used for the provision of rented accommodation, both private and commercial, the amounts of capital allowances so claimed and the estimated costs to the Exchequer are as set out in the following table. Capital allowances for rental property

The figures shown for 2002 relate to individuals only as rental income of companies was returned as excluding capital allowances on the corporation tax return for that year.

The estimates are based on assuming that tax relief was allowed at the top income tax rate of 42% (up to 2006) and 41% (for 2007 and 2008) in respect of individuals and at the standard rate of 25% in respect of companies. The figures provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers.

The figures for 2008 are subject to adjustment in the event of late returns being filed or where returns already filed are subsequently amended.

It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return form 12 is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return form 11. This return is the source of the figures provided in this reply.

The Deputy will no doubt be aware that the level at which interest repayments can be claimed against tax for residential rental properties was reduced from 100% to 75% in section 5 of the Finance Act 2009 at an estimated full year yield of €95 million.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Question 175: To ask the Minister for Finance his estimate of the savings to the Exchequer in a full year if rent relief provided to tenants was allowed only in proportion to the duration of the year spent in rented accommodation rather than as a single tax relief regardless of the number of months spent in such accommodation. [20101/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that the information requested on tax returns does not require the duration of the year spent in rented accommodation to be specified. Accordingly, there is no basis on which the estimate requested by the Deputy could be provided.

Thomas Byrne (Meath East, Fianna Fail)
Link to this: Individually | In context

Question 176: To ask the Minister for Finance the position regarding mortgage interest relief in respect of a person (details supplied) in County Meath. [20102/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The position is that an individual's entitlement to mortgage interest relief is based on a year of assessment, which is defined in the Taxes Consolidation Act 1997 as a calendar year i.e. from 1 January to 31 December. The administration of the mortgage interest relief is a matter for the Revenue Commissioners in conjunction with the relevant financial institutions.

I am advised by the Revenue Commissioners that in this particular case the first year of assessment for which the mortgage qualified for mortgage interest relief was 2003 and that entitlement ended on 31 December 2009.

In addition, the Revenue Commissioners have advised me that contact is being made with the individual concerned to confirm that the full relief available was granted for the year 2009. If there is any additional relief due for 2009, it will be paid by the Revenue Commissioners.

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

Question 177: To ask the Minister for Finance his views on whether a cohabiting couple are disadvantaged by the income tax system; his further views on amending the income tax system to provide more favourable tax treatment to cohabiting couples; and if he will make a statement on the matter. [20136/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Generally speaking, members of cohabiting couples are treated as separate and unconnected individuals for the purpose of income tax. Each partner is a separate entity for tax purposes and credits and bands and reliefs cannot be transferred from one partner to the other. The basis for the current taxation of married couples derives from the Supreme Court decision in Murphy v the Attorney General (1980) which held that it was contrary to the Constitution for a married couple to pay more tax than two single people living together and having the same income. The tax treatment of unmarried couples who cohabit was unaffected by the Murphy Judgement. Each partner is taxed as a single person and each is entitled to the tax credits and standard rate band appropriate to single persons.

To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage. Any change in the tax treatment of cohabiting couples would need to be addressed in the broader context of future social and legal policy development in relation to such couples.