Written answers

Thursday, 30 June 2011

Department of Finance

National Asset Management Agency

5:00 am

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 88: To ask the Minister for Finance if he will provide details of the losses carried forward at the end of 2010, for each of the financial institutions participating in the National Asset Management Agency, which will be available for offset against future profits for taxation purposes. [18136/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that information in relation to cumulative tax losses being carried forward by financial institutions is derived from corporation tax returns filed for the year 2009, the first year for which this information is available. Data for the year 2010 is not yet available. The available information is the amounts of unused losses and capital allowances that are available for carryover to years following 2009 by financial institutions participating in the National Asset Management Agency and is estimated to be in the region of €17,877 million.

The figures are based on the amounts of unused losses and capital allowances as derived from the 2009 tax returns as being available for carryover to years following 2009 before deduction of any losses and capital allowances that are used in the compilation of group relief. For technical reasons, it is not possible to provide a breakdown at company level of unused losses and capital allowances that are surrendered to other companies within a group structure and then claimed as group relief.

Special arrangements apply in the case of financial institutions, in the context of dealing with impaired loan assets. In this regard, provisions were included in the National Asset Management Agency Act 2009 to limit the amount of relief that can be claimed by participating institutions for losses carried forward from earlier years. This measure, which is provided for in section 396C of the Taxes Consolidation Act 1997, has the effect of restricting the amount of a participating institution's group trading income which can be reduced by losses brought forward from earlier periods to 50 per cent of such income. The measure will ensure that, when the institutions return to profitability, a minimum of 50% of their trading income will remain chargeable to tax in an accounting period notwithstanding claims for relief for losses carried forward into that period.

I am also informed by the Revenue Commissioners that their obligation to observe confidentiality in relation to the tax affairs of individual taxpayers and companies precludes them from providing the information requested by the Deputy on a company by company basis.

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