Written answers

Tuesday, 8 December 2015

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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172. To ask the Minister for Finance the additional revenue that would be generated if the band A9 vehicle registration tax rate was increased from 30% to 33.5%, if the band A10 rate was increased from 34% to 38.5%, and the band A11 rate was increased from 36% to 43%; and if he will make a statement on the matter. [44208/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that additional revenue of €4 million is estimated to be generated in a year from introducing the proposed rates of VRT for Categories E, F, and G, assuming a similar pattern of new and used car registrations in 2016 as in 2015.

In the first eleven months of 2015 these categories accounted for 0.7% of the new car registrations and 6.5% of the used car registrations which are liable to VRT.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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173. To ask the Minister for Finance the additional revenue that would be generated from a reduction of the pension fund allowance for tax purposes on retirement from €2 million to €0.95 million; and if he will make a statement on the matter. [44209/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I assume that the Deputy's reference to a pension fund allowance is meant to refer to the Standard Fund Threshold or SFT. The SFT is the maximum allowable pension fund on retirement for tax purposes which was introduced in Budget and Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. The threshold was initially set at €5 million, which was subsequently reduced to €2.3 million in 2010 and further reduced in Budget 2014 and Finance (No 2) Act 2013 to €2 million with effect from 1 January 2014.

Information on the numbers and values of individual pension funds or on individual accrued benefits in pension schemes are not generally required to be supplied to either the Revenue Commissioners or to my Department by the administrators of pension schemes and personal pension arrangements. The estimate of the yield expected to arise from the changes to the SFT regime introduced in Budget 2014 and Finance (No 2) Act 2013 referred to above was arrived at following considerable internal work over a period by my Department involving, among other things, data gathering and consultation with private sector sources relating to the specific changes to be made. There is no readily available underlying data or methodology on which to base reliable estimates of the tax yield that would arise from further changes to the SFT of the scale envisaged in the question.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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174. To ask the Minister for Finance his views on a matter (details supplied) regarding tax relief on mortgages; and if he will make a statement on the matter. [44213/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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When calculating rental income for tax purposes, an individual may be allowed a deduction of 75% of the interest paid on borrowed money used to purchase, improve or repair rented premises when calculating rental income. There are also a number of other allowances and deductions available to reduce the tax on rental income paid. These include, for example, the cost to the landlord of any goods provided or services rendered to a tenant and the cost of maintenance, repairs, insurance and management of the property.

The Office of the Revenue Commissioners has published a guide to the income tax treatment of rental income. It sets out the amount of rental income to be taken account of for income tax purposes and provides a comprehensive list of expenditure items that are allowable for deduction in computing rental income for tax purposes. This guide is available at:  .

The Deputy may also be aware that in the current Finance Bill I am providing for a full 100% interest deduction where the landlord undertakes, for a period of at least three years, to provide accommodation to tenants in receipt of social housing supports and registers such undertakings with the Private Residential Tenancies Board within certain time limits.

I am conscious of the challenges that individuals continue to face, despite the improving economic conditions. However I would also note that the changes to the income tax system included in Budget 2015 mean that individuals who paid Income Tax and or USC in 2014 are facing reduced tax bills in 2015, where incomes are equal. Budget 2016 is now continuing this process of reducing the tax burden on low and middle income earners including, among other changes, a decrease in the three lowest rates of USC announced to take effect from January 2016.

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