John Lahart (Dublin South West, Fianna Fail)
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239. To ask the Minister for Finance if his Department has assessed the impact of the coming into effect of Chapter 4A of Part 12 of the Taxes Consolidation Act providing a termination of the carry-forward of certain unused capital allowances; his plans to review the issue; and if he will make a statement on the matter. [19387/17]

Michael Noonan (Limerick City, Fine Gael)
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Chapter 4A of Part 12 Taxes Consolidation Act (TCA) 1997, which was introduced in Finance Act 2012, provides for a termination of the carry-forward of certain unused capital allowances after the “tax life” of the relevant building or structure has ended. With effect from 1 January 2015, any unused accelerated capital allowances, which are carried forward beyond the “tax life” of the building or structure to which they relate, are lost immediately

I am advised by Revenue that a Revenue eBrief was issued on 1 September 2015 to draw the attention of taxpayers and their agents to the implications of this measure. It outlined the changes introduced and provided a timely reminder to anyone filing tax returns that the capital allowances computations carried forward to 2015 should be adjusted to exclude any building or structure whose “tax life” ended in 2014. Revenue issued a further eBrief in the matter in April 2016. Revenue has included a reminder note on Income Tax and Corporation Tax Return forms since 2015, in the relevant section where capital allowances claims are made by taxpayers, that the carry forward of excess accelerated capital allowances by passive investors is no longer available in accordance with Chapter 4A of Part 12 TCA 1997.

I am further advised by Revenue that the bulk of tax returns to potentially reflect the effects of the restriction contained in Chapter 4A were only received in late 2016. Revenue is currently examining criteria to assist in identifying specific cases where unused capital allowances have been carried forward previously to ensure that the requirements of the legislation have been met.

An economic impact assessment on the impact of property based reliefs was published by my Department in December 2011. As part of the work leading to that report, organisations and individuals were invited to submit their views as part of a public consultation process which ran from 23 June to 29 July 2011. Over 700 individual responses were received.

Finally, the deputy will note that in my Budget speech for Budget 2012, I said that there was scope for those with larger incomes to contribute more. I also said that the timescale for the termination of the carry-forward of unused capital allowances, allowed time for individuals to adjust to the change.