Pearse Doherty (Donegal, Sinn Fein)
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35. To ask the Minister for Finance to clarify that credit servicing firms, regulated by the central Bank of Ireland, are permitted to hold legal title of mortgages without owning the loan related to the mortgage; and if he will make a statement on the matter. [26347/25]

Pearse Doherty (Donegal, Sinn Fein)
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42. To ask the Minister for Finance further to Parliamentary Question No.54 of 14 May 2025, to clarify that his Department nor the central Bank of Ireland is aware or collects the data in relation to the number of legal titles held by credit servicing firms in relation to Irish property; and if he will make a statement on the matter. [26365/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 35 and 42 together.

The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 (the 2015 Act) and the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 (the 2018 Act) apply to the activity of credit servicing in relation to relevant credit agreements. The Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 and EU Directive 2021/2167, which was transposed by the European Union (Credit Servicers and Credit Purchasers) Regulations 2023, will apply to agreements within the scope of those enactments.

The 2015 Act made the activity of credit servicing a regulated activity. This legislation ensured that where an unregulated entity acquired the legal title to the rights of the creditor under a relevant credit agreement (legal title loan 'owner'), that entity had to become a regulated entity unless the agreement was serviced by a regulated credit servicing firm or by an alternative type of regulated entity such as a bank or retail credit firm.

Credit servicing includes specified activities relating to the management and administration of credit agreements and, because credit servicing is a regulated activity, the consumer protection regulatory framework applies to all relevant regulated firms and the relevant credit agreements serviced by those firms.

Subsequently, the 2018 Act expanded the scope of credit servicing to include, in and of itself, holding the legal title to the rights of creditor and associated ownership activities. Any entity with such a legal interest in a relevant loan, if not already subject to Central Bank regulation, has to be authorised as a credit servicing firm even where the entity had already appointed a person authorised to carry out credit servicing activities.

Under the 2018 Act, the determination of the overall strategy for the management and administration of a portfolio of credit agreements and the maintenance of control over key decisions relating to such a portfolio also became a credit servicing activity subject to regulation.

While credit servicing, including legal title loan ownership, in relation to a relevant agreement is a regulated activity, the holding of a beneficial interest in the entitlements of the creditor under such an agreement (beneficial loan 'owner') is not a regulated activity and, unless such an entity is also carrying on a credit servicing activity, it does not fall within the regulatory remit of the Central Bank.

As there is also a legal title loan owner and/or a credit servicer associated with a loan in such circumstances, those relevant agreements and the borrower party to those agreements are nevertheless within Central Bank consumer protection framework.

Also as previously indicated, in its ‘Residential Mortgage Arrears & Repossessions Statistics’ the Central Bank publishes certain mortgage data, including the aggregated number and value of residential mortgage accounts, managed by resident banks, retail credit firms and credit servicing firms. However, a further breakdown of that data is not available in respect of the mortgages specifically managed by credit servicing firms.

Pearse Doherty (Donegal, Sinn Fein)
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36. To ask the Minister for Finance to clarify when a loan related to a mortgage is sold to a section 110 special purpose vehicle and the legal title is transferred to a credit servicing firm, which party is responsible under subsection (5A), provided in section 110, provided no exemptions apply for the tax liabilities on revenue generated from specified mortgages; and if he will make a statement on the matter. [26348/25]

Pearse Doherty (Donegal, Sinn Fein)
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37. To ask the Minister for Finance to provide the total number of S110 special purpose vehicles that hold ownership of mortgage loans which qualify as specified mortgages under subsection 5A each year since 2017 irrespective of any exemptions; and if he will make a statement on the matter. [26351/25]

Pearse Doherty (Donegal, Sinn Fein)
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38. To ask the Minister for Finance further to Parliamentary Question No. 53 of 14 May 2025, the total number of loans related to specified mortgages held by the S110 special purpose vehicle listed as having a non-deductible interest under 5A(d) each year; and if he will make a statement on the matter. [26359/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 36, 37 and 38 together.

Finance Act 2016 made certain changes to the taxation of qualifying companies, within the meaning of section 110 Taxes Consolidation Act 1997 (“TCA 1997”). The changes, which included the introduction of a new subsection (5A) in section 110, relate to the taxation of profits derived from the business of qualifying companies that involves the holding, managing or both the holding and managing of specified mortgages, including any activities which are ancillary to that business, after 6 September 2016. Specified mortgages refer to any financial assets that derive their value, or the greater part of their value, directly or indirectly from land in the State. Subsection (5A) requires that the part of the qualifying company's business that relates to specified mortgages is treated as a separate business from any other business the company may carry on and, with certain exceptions, no interest above an arm's length rate is deductible in computing the taxable profits of that part of the business.

In circumstances where a qualifying company, transfers legal title only to specified mortgages to a credit servicing firm, the rules contained in subsection (5A) of section 110 will still apply to the qualifying company as it continues to be the beneficial owner of the specified mortgages and any interest arising in respect of them.

Based on corporation tax filings, the total number of companies whose assets include specified mortgages from 2017 are as follows: