Ciara Conway (Waterford, Labour)
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72. To ask the Minister for Finance if probate on wills is subject to stamp duty; if stamp duty was imposed on probate, the amount it would realise for the Exchequer; and if he will make a statement on the matter. [35987/13]

Kevin Humphreys (Dublin South East, Labour)
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114. To ask the Minister for Finance if any stamp duty applies to probate; the projected yield from a 1% rate; and if he will make a statement on the matter. [36277/13]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 72 and 114 together.

I am informed by the Revenue Commissioners that probate on wills is not subject to Stamp Duty. To estimate the potential yield from a Stamp Duty on probate, one would need to identify the value of all estates in probate, which is not possible from the data available at present. I am advised by my colleague, the Minister for Justice and Equality, that probate is a legal process whereby a grant of representation is issued by the High Court Probate Office or District Probate Registry in respect of a deceased person's estate. The grant of representation gives legal authority to a person or persons to access the estate and administer it in accordance with the law. The Probate Office is an office of the High Court and management of the courts is the responsibility of the Courts Service which is independent in exercising its functions under the Courts Service Act 1998.

Where a Grant of Representation in a deceased person’s estate is extracted, it is subject to a Court Fee. The Court Fee in question is calculated in accordance with the Supreme and High Court (Fees) Order (S.I. 239 of 2013) and is assessed on the basis of the value of the net estate of the deceased person. The Courts Service has advised that in 2012 fees of €1,860,967 were collected in respect of applications to the High Court Probate Office for Grants of Probate and administration. Details of the fee income collected in the 14 District Probate Registries are not readily available.

A Probate Tax on estates was introduced by Finance Act 1993. The tax treated the estate of a deceased person as an inheritance taken by the executors or administrators of the estate. The net estate – that is, the assets of the deceased valued at the date of death, less liabilities at the date of death and reasonable funeral expenses – was deemed to be an inheritance taken by the executors or administrators. The rate of Probate Tax applied to the net estate was 2%. One of the main difficulties with Probate Tax was that it had to be paid prior to the grant of probate or administration. As funds in an estate cannot be released until after the grant, the imposition of probate tax placed a severe cash-flow burden on executors or administrators of estates who, if other funds were not available, had to arrange borrowings to discharge the liability. In many cases, this caused hardship for estates that had no liquid assets and where sales of property took time. Probate Tax was abolished by Finance Act 2001.

Capital Acquisitions Tax (CAT) was introduced in 1976 and includes both gift tax and inheritance tax. CAT is an acquisitions tax that imposes a tax charge on individuals after they receive gifts or inheritances. The charge arises at a time when the person is in a position to pay the CAT on the gift or on the inheritance, because s/he is in possession of the benefit received. CAT is therefore considered a more appropriate form of taxation of inheritances. I do not intend to reintroduce a Probate Tax on estates or a Stamp Duty on probate. However the Deputies may be aware that the rate of CAT on inheritances has been increased from 20% in 1999 to the current rate of 33%, and the tax-free thresholds have been considerably reduced since 2009.

Ciara Conway (Waterford, Labour)
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73. To ask the Minister for Finance the reason a non-means tested State pension is fully exempt from the universal social charge; if the non-means tested State pension was subject to a USC, the amount it would realise for the Exchequer; and if he will make a statement on the matter. [35989/13]

Michael Noonan (Limerick City, Fine Gael)
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The position is that the Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. Payments that are made under the Social Welfare Acts are and have always been specifically excluded from liability to USC. Accordingly, all State contributory and non-contributory pensions are exempt from the charge. I would also draw the Deputy’s attention to the fact that certain payments, which are of a similar character to social welfare payments, are also exempt from universal social charge. A list of such payments is included at Appendix A, page 49, of the FAQs relating to the universal social charge published by the Revenue Commissioners and available at http://www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf.

To estimate the potential yield from applying the USC to non-means tested State Pensions i.e. the contributory State Pension and the State Pension (Transition) it would be necessary to identify certain details in respect of each recipient of social protection payments such as the individual amount of these payments received, the amount of any other income potentially liable to USC, the age of each individual and whether there was an entitlement to a medical card etc. This information would be essential to determine what rate of USC would apply at an individual level. It is possible that in many cases the rate would be low.

I am informed by the Revenue Commissioners that as they do hold or have access to the required information set out above, there is no basis on which an estimate of the yield from the change mentioned in the question could be compiled. However, by way of illustration, if for example, a 1 per cent levy was imposed on social protection contributory State Pensions and the State Pension (Transition) the full year yield to the Exchequer would be €41 million on the basis that the estimated provision for such payments in 2013 is approximately €4.1 billion. The estimate of Exchequer yield assumes that there is no exemption threshold, allowance or personal reliefs that could be used to offset against the levy.