Regina Doherty (Meath East, Fine Gael)
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317. To ask the Minister for Finance if he will provide clarification on the tax treatment with regard to a qualified adult allowance and a State pension, specifically pre budget 2014; and if there is an obligation to declare a spouse's pension as part of that person's income. [31003/15]

Michael Noonan (Limerick City, Fine Gael)
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The State pension, including any increase for a qualifying adult dependent, is chargeable to income tax. Where an individual is entitled to the State pension and such pension is increased by virtue of that individual having a qualifying adult dependant, it remains one pension for tax purposes. Therefore the whole of such income, i.e. State pension plus adult dependant element, has always been treated for tax purposes as being income in the hands of the claimant only.

This position was not changed by Finance (No. 2) Act 2013, which inserted Section 126 (2B) to the Taxes Consolidation Act 1997 in order to reaffirm the position that any increase in the amount of such a pension in respect of a qualifying adult is treated as if it arises to, and is payable to, the beneficiary of the pension i.e. the person who qualifies for the pension. It is, therefore, that person's obligation to declare the pension, including any amount paid in respect of a qualifying adult dependent, as part of his or her income.

Shane Ross (Dublin South, Independent)
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318. To ask the Minister for Finance his plans to provide relief in the next budget to current homeowners in negative equity who are in receipt of rental income for their sole property, but also pay rental income themselves; and if he will make a statement on the matter. [31010/15]

Michael Noonan (Limerick City, Fine Gael)
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I am conscious of the challenges that individuals continue to face, particularly those who purchased homes at the peak of the property market, despite the improving economic conditions. All those paying USC and /or income tax are benefitting from the tax package announced in the last Budget, and as the Deputy is aware, I have stated my intention to prioritise further reductions in the tax burden faced by those on low and middle incomes in Budget 2016 and subsequent budgets, subject to having the required fiscal space.

With regard to the taxation of rental income, as the taxation of all rental property in the State is dealt with under the same legislation, an attempt to successfully carve out a specific cohort of landlords, such as homeowners in negative equity who rent elsewhere, in a manner that would avoid or minimise leakage might prove problematic.  In addition, it would be very difficult to police given that some individuals may seek to artificially qualify for the beneficial treatment proposed.

The creation of a separate category of residential landlords for tax purposes could also create difficulties in the market place. For example, such landlords could (by virtue of the tax saving) generate higher rental profits from the same market rents, thus obtaining an unfair advantage over other landlords of residential property.

Notwithstanding these points, the Deputy's suggestion has been noted and will be considered as part of my deliberations for the forthcoming Budget. Preparations for Budget 2016 and the consequent Finance Bill are ongoing, and it would not be appropriate for me to comment at this time on the specific detail of what changes, if any, are being considered regarding the taxation of rental income or any other tax measure.