Written answers
Wednesday, 19 November 2014
Department of Finance
Tax Yield
Lucinda Creighton (Dublin South East, Independent)
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52. To ask the Minister for Finance the forecasted yield in capital acquisition tax revenue from proposed changes to section 82 of the Capital Acquisitions Tax Consolidated Act 2003 for 2015 and 2016; and if he will make a statement on the matter. [44509/14]
Lucinda Creighton (Dublin South East, Independent)
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53. To ask the Minister for Finance the total number of persons who paid capital acquisition tax from 2011 to date in 2014; if he will itemise each asset class that capital acquisition tax was paid on for each year; if he will provide the total capital acquisition tax paid on inheritances for each year; and if he will make a statement on the matter. [44510/14]
Lucinda Creighton (Dublin South East, Independent)
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54. To ask the Minister for Finance the reason the group threshold as defined in the Capital Acquisitions Tax Consolidation Act 2003 was not increased to reflect rising house prices and the rise in the consumer purchase index in the previous year; his views that the lowering of the group threshold in budget 2013 was based on falling house prices; the reason the threshold has not been increased now that average house prices in Dublin have already exceeded the current threshold; the reason the group threshold is set at the lowest levels since 1995; and if he will make a statement on the matter. [44511/14]
Lucinda Creighton (Dublin South East, Independent)
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56. To ask the Minister for Finance the way an incapacitated person over the age of 25, who became permanently incapacitated after reaching the age of 21, but was not in full-time education or training for a trade or profession for a minimum of two years but receives financial support from their parents who had previously relied upon section 82 of the Capital Acquisitions Tax Consolidated Act 2003 will be affected by the proposed changes to the Act; and if he will make a statement on the matter. [44539/14]
Lucinda Creighton (Dublin South East, Independent)
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57. To ask the Minister for Finance if he will instruct the Revenue Commissioners to publish the detailed public statement which they intend sending to practitioners, outlining the way the newly amended section 82 of the Capital Acquisitions Tax Consolidated Act 2003 will work in practice; and if he will make a statement on the matter. [44540/14]
Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 52 to 54, inclusive, 56 and 57 together.
In relation to the first question, I am informed by the Revenue Commissioners that because Section 82 of the Capital Acquisitions Tax Consolidation Act 2003 is an exemption provision, there is no requirement to include the amount of payments in respect of which exemption is taken in a return to the Revenue Commissioners. Accordingly, it is not possible to forecast what the capital acquisitions tax yield is likely to be from the proposed changes. In any event, the changes being proposed to section 82 in Finance Bill 2014 are not for the purpose of raising tax revenue but to counter abuse of the provision.
In relation to the second question I am advised by the Revenue Commissioners that information in relation to the number of persons who paid capital acquisitions tax each year is not directly available. However, the number of persons who filed capital acquisitions tax returns in the years 2011-2013 and to date in 2014 and who had a liability to capital acquisitions tax is as shown in the table.
| Year | Number |
|---|---|
| 2011 | 11,129 |
| 2012 | 11,520 |
| 2013 | 11,595 |
| 2014 (To-date) | 11,776 (Provisional) |
It is not possible to provide a breakdown of capital acquisitions tax by asset class as the capital acquisitions tax returns do not require a breakdown of the tax due by asset type and there is, therefore, no reliable basis for compiling this information.
The total capital acquisitions tax paid on inheritances in each of the four years is as follows:
| Year | € Million |
|---|---|
| 2011 | 213.5 |
| 2012 | 254.3 |
| 2013 | 257.5 |
| 2014 (To end October) | 146.8 (Provisional) |
As regards the third question, there are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.
The Group A tax free threshold of €225,000, applies where the beneficiary is a child (including adopted child, stepchild and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
The Group B tax free threshold of €30,150, applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.
The Group C tax free threshold €15,075, applies in all other cases.
Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at a rate of 33% applies on the excess over the tax free threshold. These thresholds have been reduced in recent years in order to maintain the yield from capital taxes, as part of the effort to restore the public finances, as taxes on capital are less harmful from an economic perspective than taxes on employment.
The property market continues to improve with positive developments which had been restricted to the Dublin area now manifesting in other areas of the country though not to the same extent in terms of price rises. I recognize, of course, that there are supply issues in certain areas of the Dublin property market.
The Group tax-free thresholds are kept under review, in the same way as other relevant tax provisions, and in this regard I will bear the Deputy's comments in mind for the future.
In relation to the fourth question, CAT exemption for payments made by parents for the support or maintenance of dependent relatives (including children who are incapacitated by physical or mental infirmity) are dealt with separately under section 82 CATCA 2003 and this exemption applies provided the income of the dependent relative does not exceed approximately €13,800 per annum. However, to ensure that all children, regardless of age and income level, who are permanently incapacitated by reason of physical or mental infirmity are exempt from tax under Section 82, I have tabled a Committee Stage amendment to the Finance Bill to provide specifically that payments for support, maintenance or education in relation to such incapacitated children will not be subject to an age restriction.
In relation to the final question, it would not be appropriate for me to instruct the Revenue Commissioners in relation to what information they should publish, as they are independent in the exercise of their functions. However, I am informed by the Revenue Commissioners that they will publish a detailed statement on the application of Section 82 of the Capital Acquisitions Tax Consolidation Act 2003, once the Finance Bill is enacted.
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