Tommy Broughan (Dublin North East, Independent)
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Question 153: To ask the Minister for Finance the savings to the Exchequer if all tax exemptions for private hospitals were terminated; and if he will make a statement on the matter. [36665/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The scheme of capital allowances for the construction or refurbishment of buildings used as private hospitals was introduced in Finance Act 2001 and came into effect in May 2002. As announced in the 2009 Supplementary Budget in April 2009 and reflected in section 8 of Finance Act 2009, the scheme of capital allowances for private hospitals was terminated from 31 December 2009 along with certain other health-related capital allowances schemes, subject to transitional arrangements for pipeline projects. Under the transitional arrangements, if certain qualifying criteria are met, the termination date for qualifying expenditure is extended. For example, where planning permission is required for the project involved and a valid application for full planning permission is submitted on or before 31 December 2009 (and acknowledged by the relevant planning authority), the termination date for qualifying expenditure is 31 December 2013.

I am informed by the Revenue Commissioners that, based on the information that has been received and collated for the tax year 2008, (the latest year for which full data is available) there were 339 claims for €30.1 million capital allowances for the construction of private hospitals. This figure would correspond to a maximum Exchequer cost of the order of €12.3 million for these returns in terms of income tax foregone. The information required in tax returns on the annual amounts of claims for this tax relief would not be sufficiently detailed to provide a basis for deriving an estimate of the remaining legacy cost to the Exchequer. I am not therefore in a position to provide the information requested by the Deputy.

I should also point out that the provisions of section 23 Finance Act 2010 severely curtails the amount of tax reliefs that can be used to reduce the income tax liability of those on high incomes. These provisions ensure that, in addition to PRSI and levies, those with high incomes and using reliefs will have an effective income tax rate of about 30%. This measure applies to a list of specified reliefs, including property-based tax reliefs, the use of all of which has been curtailed as a result of this change.