John Lahart (Dublin South West, Fianna Fail)
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422. To ask the Minister for Finance his plans to amend inheritance tax in Budget 2024; and if he will make a statement on the matter. [37201/23]

John Lahart (Dublin South West, Fianna Fail)
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423. To ask the Minister for Finance if he will consider the concept of a 'notional spouse' for single persons with respect to capital acquisitions tax; and if he will make a statement on the matter. [37202/23]

John Lahart (Dublin South West, Fianna Fail)
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424. To ask the Minister for Finance the changes he will make to inheritance tax in Budget 2024 with respect to single persons; and if he will make a statement on the matter. [37203/23]

John Lahart (Dublin South West, Fianna Fail)
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439. To ask the Minister for Finance if he is considering the treatment of family members such as sisters, brothers, nieces and nephews as a notional spouse, in order to decrease the amount of inheritance tax paid by relatives of persons who do not have children or a spouse to pass property onto; and if he will make a statement on the matter. [37672/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 422, 423, 424 and 439 together.

As you may be aware, for the purposes of Capital Acquisitions Tax (CAT), 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 life-time tax-free threshold. This is known as the “Group threshold” below which gift or inheritance tax does not arise and relates to the allowance referred to in your correspondence. Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at the 33% rate applies on the excess over the tax free threshold.

The Group A threshold (currently €335,000) applies where the beneficiary is a child of the person giving it. The Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer. The Group C threshold (currently €16,250) applies in all other cases.

While a single person may have no natural children, any stepchildren, adopted children or certain foster children can avail of the Group A threshold in respect of gifts and inheritances received from that disponer.

In addition, nieces or nephews of that disponer may qualify for favourite niece or favourite nephew relief in respect of gifts or inheritances of business assets. The relief allows a niece or nephew who qualifies for the relief to avail of the Group A threshold. Qualifying nieces or nephews are those who have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer.

For the nephew or niece to be deemed to be working substantially on a full-time basis in the business he or she must work:

* more than 24 hours per week at the place where the business, trade or profession is carried on; or

* more than 15 hours per week at the place where the business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer and the nephew or niece.

Furthermore, it is worth noting that there is an exemption from CAT where dwelling houses are bequeathed by individuals who live there to successors who:

* have lived there for a specified period of time before the inheritance,

* will continue to live there for a specified period of time after the inheritance, and

* who have no beneficial interest in any other residential property at the date of the inheritance.

The policy rationale behind the dwelling house exemption is to protect the family home by ensuring that a beneficiary who has been living with the disponer, and will continue to reside there after the inheritance, does not have to sell that family home to pay a CAT liability and thus will continue to have somewhere to live. It is not necessary for the beneficiary of an inheritance under the dwelling house exemption to be a child or relative of the disponer.

In relation to the Deputy’s reference to a "notional spouse" concept, it is important to note that differences in the tax treatment of the different categories of individuals and couples arise from the objective of dealing with different circumstances. Under the law, couples who have obtained legal recognition of their relationship status through marriage or civil partnership are not in an analogous situation to others who are unmarried or single, which is why they are not accorded similar tax treatment to couples who have a civil status that is recognised in law. Any change in the tax treatment of individuals or couples, including in the manner as suggested in the "notional spouse" concept, can only be addressed in the broader context of future social and legal policy development.

Regarding inheritance tax changes, is important to note that there would be a significant cost in making substantial changes to the CAT thresholds and/or rate of CAT. Recent Revenue estimates put the full cost of increasing the CAT Group A threshold from its current €335,000 to €400,000, for example, at approximately €52 million. The estimated cost of increasing the Group B threshold from its current €32,500 to €35,000 would be €9 million, while the cost of increasing the Group C threshold from €16,250 to €19,000 is estimated be €4 million. Revenue estimates also indicate that reducing the rate of CAT by 1%, 3%, 5% or 10% would result in a corresponding reduction in yield for the exchequer of €20m, €61m, €102m or €205m respectively.

The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.

Danny Healy-Rae (Kerry, Independent)
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425. To ask the Minister for Finance for an update on a matter (details supplied). [37231/23]

Seán Canney (Galway East, Independent)
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451. To ask the Minister for Finance when the appropriate amendment will be made to the Finance Act to exempt functional farmland from the residential zoned land tax. [38162/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 425 and 451 together.

The Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing. The tax is an action contained in Housing for All, the Government’s plan for housing, to increase housing supply and is supported in the Programme for Government.

The tax applies to land that is:

• zoned suitable for residential development whether it be solely or primarily for residential use, or for a mixture of uses, including residential use, and
• serviced (that is: reasonable to consider may have access, or be connected, to public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed and with sufficient service capacity available for such development)

Each local authority in the State was responsible for the preparation of an RZLT map for their functional area. Each local authority, in preparing the draft RZLT maps, determined whether the zoned land is connected or able to connect to the six required categories of services. Any exclusions which would rule the land out of scope were applied. The local authority then published a draft RZLT map identifying the land which meets the requirements of the legislation and which may be liable to the tax. The tax will first be due and payable in 2024.

It is important to note that, to come within the scope of RZLT, agricultural land must be both zoned for residential use and serviced. Farmland that is zoned for residential use, but which is not currently serviced, is not within the scope of the tax and will only come within the scope of the tax should the land become serviced at some point in the future.

Agricultural land which is zoned solely or primarily for residential use meets the criteria set out within the legislation and therefore falls within the scope of the tax. Agricultural land that is zoned for a mixture of uses including residential is not in scope. These zonings are considered to reflect the housing need set out within the core strategy for the relevant local authority area and landowners within such zonings may fall within the scope of the tax, in the interests of ensuring an appropriate supply of housing on zoned lands.

A landowner with land identified on any published draft map had the opportunity to make a submission to the relevant local authority regarding the land, setting out why they consider that the land does not meet the criteria for inclusion within the scope of the tax. For example, if the land is not zoned for residential use, if the land does not have access to or there is no capacity for any of the six servicing criteria, or if the land benefits from an exclusion as outlined in the legislation. Each local authority was required to assess any submission and inform the landowner of their decision to either remove or retain the land on the map by 1 April 2023. If dissatisfied with the local authority decision, the landowner could have appealed the determination to An Bord Pleanála, again setting out why the land does not meet the criteria for inclusion for the tax.

In addition to being able to make a submission regarding inclusion of land on a draft map, the landowner had the opportunity to submit a request to change the zoning of the land by variation of the adopted development plan. Where the zoning is amended to a use other than residential or mixed use including residential, it would not meet the criteria for the tax and would be removed from RZLT maps. Decisions on whether to amend zonings as a result of submissions or at any other time are a matter for each local authority, taking into account the need to ensure that housing supply targets across the county can be met. It is also worth noting that provision is made in the Planning and Development Act 2000 for elected members to seek a report from their Chief Executive on the matter of proposed re-zonings.

Furthermore, Finance Bill 2022 introduced an exemption for land that is within the scope of the tax but is subject to a contract that precludes the landowner from developing it. For the exemption to apply, the contract must have been entered into prior to 1 January 2022, i.e., prior to the introduction of RZLT. For example, where a farmer leased land prior to 1 January 2022 and the requisite conditions are met, the farmer may claim an exemption from the tax for the period of the lease.

It is acknowledged that the tax will impact on landowners, however if the land in question is zoned for a particular purpose under a plan adopted by the local authority and has been subject to investment by the local authority and the State in the services necessary to enable development for housing to accommodate increased population, it is intended that the land should be used for housing. This tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations.

Officials from Department of Finance and Department of Housing, Local Government and Heritage continue to engage with various representative bodies, including those representing the agricultural sector, in relation to the RZLT measure.

Pauline Tully (Cavan-Monaghan, Sinn Fein)
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426. To ask the Minister for Finance if a company that purchases pre-cast ready-mix cement for the manufacture of its pre-cast concrete products is exempt from the concrete levy; if so, the process by which the company it buys pre-cast cement from can remove this levy from the purchase price; if a rebate will be payable if a process is not in place where the levy is removed from the purchase price; and if he will make a statement on the matter. [37373/23]

Pauline Tully (Cavan-Monaghan, Sinn Fein)
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427. To ask the Minister for Finance if a response will issue to a person (details supplied) in relation to whether they are exempt from the cement levy and how they can ensure they do not pay this levy if they are exempt; and if he will make a statement on the matter. [37374/23]

Carol Nolan (Laois-Offaly, Independent)
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473. To ask the Minister for Finance to clarify the position of his Department with respect to the planned introduction of the defective concrete products levy from 1 September 2023; if it is the understanding of his Department that ready mixed concrete used as an ingredient to make precast concrete will fall within the scope of the levy; if he is aware that this would conflict with the position outlined by his predecessor, namely, that the levy would exclude precast products; and if he will make a statement on the matter. [38745/23]

Michael Healy-Rae (Kerry, Independent)
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474. To ask the Minister for Finance if pre-cast concrete products that are produced in Ireland will be levied; if not, if they will be made exempt (details supplied); and if he will make a statement on the matter. [38753/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 426, 427, 473 and 474 together.

As the Deputies are aware, arising from a November 2021 Government decision that a levy be imposed on the construction sector to contribute towards the cost of the Mica Redress Scheme, the Defective Concrete Products Levy was announced as part of Budget 2023.

The Defective Concrete Products Levy (“DCPL”) applies, at a rate of 5% of the market value of the concrete products within scope of the levy, at the point of first supply of those products in the State on or after 1 September 2023. The levy applies to both supplies within the State and into the State (from outside the State) to ensure fairness of application of the levy.

The following products come within the scope of the levy:

(a)products, containing concrete, that are required to comply with the following EU Harmonised Standards (or adapted national version of such Harmonised Standard), as set out in Schedule 36 to the TCA 1997 -

• EN 771-3:2011+A1:2015 Specification for masonry units - Part 3: Aggregate concrete masonry units (Dense and lightweight aggregates), and
• EN 771-4:2011+A1:2015 Specification for masonry units - Part 4: Autoclaved aerated concrete masonry units,

(b)ready to pour concrete which is chargeable to Value Added Tax at the rate of 13.5% under paragraph 16(1) of Part 4 of Schedule 3 of the Value Added Tax Consolidation Act 2010.

Products, including pre-cast products, not falling within the above outlined EU Harmonised Standards are not within the scope of the levy and therefore the levy does not apply on supplies of such products.

Under the legislation giving effect to the DCPL, all supplies of ready to pour concrete are, from 1 September 2023, within the scope of the levy including where the concrete is utilised in the manufacture of pre-cast products. This is the case regardless of whether the supplier of the ready to pour concrete is in the State or the ready to pour concrete is sourced from outside the State. Where the supplier is in the State, it is the supplier who is the chargeable person for the purposes of the DCPL. Where a person acquires ready to pour concrete from outside the State, and uses it in the course of a business in the State, that person is the chargeable person for the purposes of the DPCL.

While there are no exemptions from the levy provided in the legislation as enacted, I announced on Wednesday, 6 September my intention to bring forward legislation in Finance Bill 2023 to exclude the value of pouring concrete used in pre-cast products from the scope of the levy with effect from 1 January 2024. I intend to introduce a refund scheme for the interim period of 1 September 2023 to 31 December 2023. Details of the amendments will be published in Finance Bill 2023.

Further information on the DCPL, including the obligations of a chargeable person, is available on the Revenue website at: www.revenue.ie/en/self-assessment-and-self-employment/dcpl/index.aspx. My Department will also respond to all queries it has received directly regarding the DCPL.

Francis Noel Duffy (Dublin South West, Green Party)
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428. To ask the Minister for Finance if retrospective payments will be considered for households who have installed solar panels before 1 May when 0% VAT applies; and if he will make a statement on the matter. [37398/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. From 1 May 2023, and in accordance with the Directive and Irish legislation, the supply and installation of solar panels on or adjacent to immovable property, being private dwellings, is subject to the zero rate of VAT. For the zero rate to apply, both the supply of the solar panels and their installation must be the responsibility of the same business in the same supply (i.e. a supply and install contract).

In accordance with EU and Irish VAT legislation, a VAT-registered trader is obliged to include VAT as part of the price for goods and services that the trader supplies. Goods or services which are supplied to unregistered persons or private individuals prior to the date of a change in a VAT rate are taxable at the VAT rate in force at the time when they are supplied. There is no provision in the Directive to permit individuals acting in their private capacity to reclaim VAT incurred on their purchases.

The zero rate of VAT for solar panels can only operate from 1 May 2023. I have no discretion to apply this measure on a retrospective basis.

Patrick Costello (Dublin South Central, Green Party)
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429. To ask the Minister for Finance the reason that alcohol-free beverages cost the same as their alcoholic counterparts given that no excise duty applies; if he will take appropriate steps to ensure that there is a price differential to encourage more persons to switch to alcohol-free drinks; and if he will make a statement on the matter. [37399/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Alcoholic beverages are subject to alcohol products tax. For example, excise duty on beer is charged based on the percentage, by volume, of alcohol in the beverage. Typically, the excise duty on a pint of 4.3% ABV beer is 54 cent. Non-alcoholic beer is not liable for any excise duty.

Alcoholic beverages are subject to the standard rate of VAT, currently 23%. Ireland currently operates two lower rates of VAT, 13.5% and 9%. At present, Ireland applies the 9% VAT rate to certain non-alcoholic beverages such as tea, coffee and fruit juices where they are supplied in the course of catering. As the Deputy will be aware, this will revert to 13.5% from 1 October 2023 in line with the rest of the hospitality and tourism sector.

The retail price of non-alcoholic beers is determined by retailers and publicans and this should reflect the fact that no excise applies to such products as well as other factors. Other than the portion that is taxation, the Department has no role in setting the price of these beverages.

Patrick Costello (Dublin South Central, Green Party)
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430. To ask the Minister for Finance if he will reduce alcohol-free beverages VAT rate from 23% to 13.5% which is in line with the rate charged to other non-alcoholic beverages in the hospitality sector; and if he will make a statement on the matter. [37401/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. In accordance with the Value-Added Consolidation Act, 2010 the supply of non-alcoholic drinks is generally liable to tax at the standard rate, currently 23%.

The VAT Directive obliges each Member State to have a standard rate of VAT and also allows that a Member State may choose to have up to two reduced rates of VAT which may be applied to certain goods and services i.e. any of those listed in Annex III of the Directive, which includes non-alcoholic beverages. Ireland currently operates two lower rates of VAT, 13.5% and 9%. At present, Ireland applies the 13.5% VAT rate to certain non-alcoholic beverages such as tea, coffee and fruit juices where they are supplied in the course of catering.

Restaurant services are liable to VAT at the reduced rate. However, supplies of alcohol, bottled waters, soft drinks, sports drinks and vegetable juices (excluding fruit juices) are liable to VAT at the standard rate even when provided as part of a restaurant service.

Any suggestion for extending the application of a reduced VAT rate further to non-alcoholic beverages would need to be considered carefully having regard to a range of factors including the impact on Exchequer revenues, and the practical concerns that it would be difficult to administer and would be likely to provide considerable scope for manipulation of the VAT system and opportunities for tax avoidance.