Thomas Byrne (Meath East, Fianna Fail)
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Question 137: To ask the Minister for Finance the impact on tax revenues of a doubling of the rate of capital acquisitions tax and if this would impact on our tax competitiveness. [28315/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from doubling the rate of Capital Acquisitions Tax from 25% to 50%, based on the Budget estimate of €240 million for 2010, could nominally be in the region of €240 million.

It should be noted that this estimate is based upon an assumption that there would be no behavioural impact of such an increase, which could lead to a less than expected result from a change to the tax rate – any behavioural impact could not apply to inheritance tax, but might apply to gift tax. In addition, the realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.

Capital acquisitions tax is due on gifts and inheritances if either the disponor – the person making the gift or leaving the inheritance – or the donee – the person receiving the gift or inheritance – is either Irish resident or ordinarily resident, or the property being gifted/inherited is Irish situate property. In this light any increase in CAT would not affect our "tax competitiveness".