Written answers

Thursday, 4 November 2010

2:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 125: To ask the Minister for Finance the way it was determined that the Revenue Commissioners should not have to refund interest paid in respect of a projected capital gain that in the event did not accrue due to failure of contract; the way it can be argued that the contract predetermines a liability to interest even though the capital was refunded; the number of similar situations that have arisen, if interest has not been refunded in any case; and if he will make a statement on the matter. [40891/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the person concerned did not pay interest to Revenue in respect of the capital gain, because the transaction in question did not give rise to an interest charge. The person has, however, been seeking the payment of interest by Revenue. The legislation providing for interest on repayment of tax is contained in section 865A of the Taxes Consolidation Act 1997, which states that interest on a repayment arises where the repayment is not made within a period of 93 days after a person's application for the repayment becomes a valid claim. In this case the person's application for repayment became a valid claim on 24 June 2009, the date the Revenue Commissioners were advised the contract was rescinded. The refund was made on 7 July 2009.

No data is available on the number of similar situations that have arisen. Interest on repayments of tax can only arise where a repayment of tax is not made within a period of 93 days after a person's application for the repayment becomes a valid claim.

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