Written answers

Tuesday, 29 September 2015

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent)
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279. To ask the Minister for Finance the amount of tax revenue that would be lost if the capital gains tax rate was lowered to 20%; the amount of additional tax revenue that would be gained if it was restored to 40%; and if he will make a statement on the matter. [33297/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that a wide range of statistical information is available on the Commissioners' Statistics webpage: . In particular, in relation to the Deputy's Question, estimates for changing rate of CGT are included in the Pre-Budget 2016 Ready Reckoner: . While the Ready Reckoner does not show the specific costings requested by the Deputy, the changes can be estimated broadly on a pro-rata (or straight-line) basis with those displayed in the Reckoner.

All estimates shown in the Ready Reckoner are provisional and subject to revision. These estimates are based upon an assumption that there would be no behavioural impact of these changes. In addition, the costs shown from decreases in taxation on assets relating to property are subject to movements in the value of such assets.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent)
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280. To ask the Minister for Finance the likely tax expenditure and cost of a published proposal to lower the rate of capital gains tax to 15% on the sale of their own businesses by start-up entrepreneurs; and if he will make a statement on the matter. [33298/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I understand that the Deputy is referring to a proposal under which relevant business owners would be entitled to pay the lower CGT rate of 15% on the first €5 million of chargeable gains.

There are gaps in the data available to the Revenue Commissioners which prevent a definitive costing of this proposal to be provided. Tax returns data available to the Commissioners do not in all cases clearly distinguish between disposals of business assets and non-business assets. Furthermore, it is not clear from the question what businesses would be considered "start-ups" and the Revenue Commissioners have no reliable data to make distinctions between businesses on that basis. Subject to these caveats, it is very tentatively estimated that the cost of introducing a €5m cap and 15% CGT rate for individuals could cost in excess of €100 million in a full year. This assumes that the reduced rate would apply in respect of all quoted and unquoted shares, commercial property disposals by proprietary directors and self-employed individuals and also agricultural land disposals by farmers. This estimate assumes no behavioural impact.

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