Joan Burton (Dublin West, Labour)
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Question 241: To ask the Minister for Finance his views on extending, under section 82 of the Taxes Consolidation Act 1997, the deductibility of pre-trading expenses to those who incurred the expense as an individual but who subsequently incorporated as a company; if he views the current legislation to be in any way anomalous and his plans to deal with any such anomalies in the forthcoming finance Bill; and if he will make a statement on the matter. [48330/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Section 82 TCA 1997 provides that certain pre-trading expenses of a trade or profession are allowable in calculating the trading income of that trade or profession once it commenced. The relief applies to trades or professions, whether incorporated or not, which commenced on or after 22 January 1997. A deduction is only available for pre-trading expenditure in computing income under Cases I and II of Schedule D where it is incurred in the three years prior to commencement of the trade or profession and is wholly and exclusively laid out or expended for the purposes of the trade or profession.

While a deduction for pre-trading expenditure is available under section 82 TCA, the relief is conditional on the expenditure being of a type that would have been allowable in computing income under Case I or II of Schedule D had it been incurred after the commencement of the trade or profession. For the purposes of allowing the deduction, the allowable amounts are treated as having been incurred at the time the trade or profession commences. Allowable amounts are not available for set-off against income other than income from the trade or profession.

Pre-trading expenses related to a trade or profession may not be taken into account in calculating a loss to be set-off against other income. Any losses resulting from pre-trading expenses may only be carried forward for use against future income of the trade or profession.

Arguments can be made in favour of allowing this relief to individuals who incurred pre-trading expenses and who subsequently incorporated as a company. One argument may be that it is unreasonable to deny relief to the company in respect of such expenses in a situation where the bulk of otherwise allowable expenses were properly incurred by an individual prior to the formation of the company. On the other hand, under existing legislation the losses or expenses of a sole trader may not be transferred to a company on incorporation of the business. Moreover, difficulties could arise in devising a suitable legislative framework to enable companies to obtain relief for pre-trading expenses incurred prior to incorporation where there are a number of shareholders. If provision were to be made for this, for example, it might be necessary to put restrictions on the facility so that only expenses incurred by substantial shareholders would be allowed.

Another issue to consider in this context is whether it is appropriate to allow an expense incurred by one person (e.g. an individual) to be offset against the income of another separate person, in this case a company. After all, they are separate legal persons and the implications of proceeding down this road would have to be carefully considered.

I would take the view that the current legislation is not so much reflective of a situation that is anomalous but perhaps more reflective of the difficulties involved in drawing the line under what is reasonable and appropriate. I am not aware of any major difficulties being caused by the existing legislative provisions. I am, however, open to examining the detail of any particular problems in this area that may be put to me with a view to finding a possible resolution to those problems.

Bernard Durkan (Kildare North, Fine Gael)
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Question 242: To ask the Minister for Finance the basis for alleged underpayment of income tax in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [48336/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have been advised by the Revenue Commissioners that the review for 2006 was issued in error. The person's record has been adjusted to cancel the underpayment and a revised certificate of tax credits and standard rate cut-off point for 2011 will issue to the person shortly to cancel the recovery of the underpayment.

Bernard Durkan (Kildare North, Fine Gael)
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Question 243: To ask the Minister for Finance the way he proposes to address the issues set out in correspondence (details supplied); and if he will make a statement on the matter. [48337/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I announced in the Budget that the necessary arrangements are being made to ensure that bets placed on the internet by domestic punters are subject to the same level of betting duty as applies to high street betting shops. This will serve to broaden the tax base and increase betting duty receipts. It is the Government's intention to include provisions in the Finance Bill and to revise the Betting Act 1931 to provide that bookmakers taking bets from Ireland, notwithstanding what platforms are used i.e. internet or otherwise, will pay the 1% betting duty. Betting Exchanges will also be subject to tax under the new arrangements, however the calculation of the tax will take account of their particular business model.

I am hopeful that by including the high-growth area of the betting sector the tax base from betting will be boosted significantly.

In addition, this measure conveys a positive signal to international betting operations that have expressed an interest in or have already invested in Ireland. A location with an appropriate licensing regime coupled with relatively low taxes provides real investment and employment opportunities in this sector, which ultimately can potentially be beneficial to all concerned.

Bernard Durkan (Kildare North, Fine Gael)
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Question 244: To ask the Minister for Finance if a review can or will be taken in relation to proposed carbon tax on domestic fuels which will have implications on those who sell same to the domestic market; and if he will make a statement on the matter. [48338/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The carbon tax was applied to transport fuels, petrol and auto-diesel, from December 10, 2009. From 1 May 2010, the carbon tax was applied to kerosene, marked gas oil (also known as 'green diesel' or 'agricultural diesel'), liquid petroleum gas (LPG), fuel oil and natural gas. The third and final phase involves the application of the tax to coal and commercial peat, which is subject to a Ministerial Commencement Order. Solid fuels are subject to a commencement order so as to allow time for issues such as fuel poverty and the sourcing of coal of a lower environmental standard from Northern Ireland to be addressed. Progress is being made in this regard by the Department of Environment, Heritage and Local Government.

Bernard Durkan (Kildare North, Fine Gael)
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Question 245: To ask the Minister for Finance when a tax refund will issue to a person (details supplied) in County Kildare; and if he will make a statement on the matter. [48339/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have been advised by the Revenue Commissioners that they are contacting the taxpayer's employer for the details necessary to carry out reviews. The taxpayer's liability will be reviewed on receipt of the required details and any tax overpaid will be refunded.

Maureen O'Sullivan (Dublin Central, Independent)
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Question 246: To ask the Minister for Finance the reason there is a 21 day holding period by Irish life and Permanent of British pensions paid by Irish citizens [48406/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the institution that their policy for encashment of all sterling cheques – pension and non pension - is that a hold is placed on the cheque for 20 working days. The above number of days has been set to ensure there is a fair period where the Bank/customer is protected from 'unpaid' items and that the customer is not inordinately penalised by not having access to the funds for a long period. ILP have indicated that on an individual account basis there is discretion within the Bank to pay against uncleared funds, and this can be used where the Bank considers it appropriate to allow a customer withdraw against an uncleared cheque.

Funds are immediately available where they are transferred electronically.

Dan Neville (Limerick West, Fine Gael)
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Question 247: To ask the Minister for Finance the position regarding tax credits in respect of a person (details supplied) [48418/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the individuals in question are a single male and a single female residing at the same address. The position is that there is no provision within the Tax Acts to allow for the transfer of tax credits from one individual to another in these circumstances.