Ciarán Lynch (Cork South Central, Labour)
Link to this: Individually | In context | Oireachtas source

269. To ask the Minister for Finance if any concession is made in capital acquisition tax, where a person who is of diminished capacity inherits a property, which had been provided rent-free in circumstances, where in order to meet the tax payment, it would be necessary for the inheritor to sell the property and to become dependant on the State for support; and if he will make a statement on the matter. [33276/15]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised by the Revenue Commissioners that there is no specific relief from liability to Capital Acquisitions Tax (CAT) in relation to properties acquired by way of gift or inheritance by persons of diminished capacity. However, there are general reliefs and exemptions that might be available in the type of situation envisaged.

For the purposes of CAT, the position is that the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary) determines the maximum tax-free threshold known as the "group threshold" below which gift or inheritance tax does not arise.

There are, in all, three separate group tax-free thresholds based on the relationship of the beneficiary to the disponer.

Group A: €225,000 -applies where the beneficiary is a child (including adopted child, step-child 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.

Group B: €30,150- applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.

Group C: €15,075-applies in all other cases.

Any prior gifts or inheritances received by a beneficiary since 5 December 1991 from within the same group threshold are aggregated for the purposes of determining whether any tax is payable on the current benefit. Tax at the rate of 33% is payable on any excess received over the relevant tax-free threshold.

Apart from the tax-free group thresholds available to a beneficiary, there is also a full tax exemption where a dwelling-house is received by way of a gift or inheritance in certain circumstances.

The main conditions attaching to the dwelling-house exemption are that the beneficiary must have lived in the dwelling-house for a minimum of three years prior to the receipt of the gift or inheritance and must not have an interest in any other dwelling-house.

This exemption ensures that what may be the family home for many people will not be the subject of gift or inheritance tax when it is transferred. The exemption is available to any beneficiary who meets the conditions for the exemption, irrespective of whether or not they are related to the disponer, and irrespective of the value of the property being acquired.

Where a person has a CAT liability, he or she has a statutory entitlement to pay this liability by monthly instalments over a period of up to five years.  Instalments are subject to the payment of interest at an annual rate of 8%. However, Revenue has discretion to allow payment of CAT by instalments over a longer period of time in exceptional circumstances where the tax cannot be paid without excessive hardship. In cases of hardship, Revenue also has the discretion to allow payment to be postponed for such period and on such terms (including the waiver of interest) as they think fit. Revenue will consider each case on its merits, taking into account both the financial circumstances of the beneficiary and the nature of the inheritance involved.

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

270. To ask the Minister for Finance if he will provide an update on the proposed increase in the industry funding levy; and if he will make a statement on the matter. [33281/15]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Under Sections 32D and 32E of the Central Bank Act 1942, the Central Bank is required to seek my approval for the Regulations prescribing levies and fees to be paid by entities subject to regulation by the Central Bank. However, I have not yet made any decision under Sections 32D and 32E on the 2015 levies that will be applied by the Central Bank.

I am aware that the Central Bank had consulted industry on the proposed 2015 levies which I understand would have in some cases amounted to a significant increase on 2014. The Bank attributed the proposed increase to both a proliferation of legislative regulation/regulatory activity and an increase in staff pension costs arising from Financial Reporting Standard 17 coupled with current low yields on the bond market.

The Central Bank has acknowledged the potential impact that the volatility of pension costs would have on individual levies and, as a consequence, it is considering the possibility of spreading current service pension costs over an extended period, thereby mitigating the impact on the proposed 2015 levies.

It is important to note that a robust regulatory environment benefits the financial services industry by promoting stability, a level playing field and facilitating prudent development and innovation. A well regulated financial services sector also benefits consumers, industry, and the economy at large. The Government's priority is to ensure that the regulator is sufficiently resourced to fulfil its important role and staff costs (including pension costs) are a key component of this effective regulatory regime. This is something that I will be taking into consideration in my deliberations on this matter.