Pearse Doherty (Donegal, Sinn Fein)
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241. To ask the Minister for Finance to provide in tabular form the total amount of capital gains tax paid by credit servicing firms and special purpose vehicles holding specified mortgages each year since 2010, in tabular form; and if he will make a statement on the matter. [33348/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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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.

Where a qualifying company transfers legal title only of a specified mortgage to a credit servicing firm but retains the beneficial interest in the specified mortgage, the credit servicing firm will not be subject to capital gains tax in respect of any gains related to the specified mortgage. The credit servicing firm will be subject to corporation tax in respect of any income it earns for managing or servicing the specified mortgage on behalf of the qualifying company.

A qualifying company is not subject to capital gains tax as all profits and gains arising in the course of its business are chargeable to corporation tax. If a qualifying company holds the beneficial interest in a specified mortgage, any profits or gains arising will be subject to the provisions of section 110(5A) TCA 1997 as set out in a response to Parliamentary Question No 24776/25.

I am advised by Revenue that it does not have information available from corporation tax returns to isolate the amount of gains related to specified mortgages from other taxable profits of qualifying companies.

Louis O'Hara (Galway East, Sinn Fein)
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243. To ask the Minister for Finance the way in which his Department is ensuring that people in receipt of social protection payments are taxed properly to avoid an underpayment of income tax and receiving an underpayment bill from the Revenue Commissioners; and if he will make a statement on the matter. [33377/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 126 of the Taxes Consolidation Act 1997 provides for the taxation of certain payments from the Department of Social Protection (DSP). Such payments are liable to Income Tax, although they are not subject to the Universal Social Charge (USC) or Pay Related Social Insurance (PRSI). This taxation treatment applies to long-term DSP payments, such as the State Pension, shorter-term payments such as Job Seekers Benefit, and in work supports such as Parents Benefit.

Payments from the DSP are paid gross to the recipient. Where a person in receipt of a taxable payments from DSP also has an additional source of employment or pension income, Revenue collects the tax due by reducing the person’s annual tax credits and rate band by the annual amount of their DSP income. This ensures that the DSP payment is paid gross to the recipient, while the salary or pension, as paid by their employer, will have any tax due on the DSP income deducted from it.

I am advised by Revenue that, with effect from 1 January 2025, this mechanism was extended to taxpayers who are required to file an Income Tax Return (Form 11) annually for those taxpayers in receipt of other income taxed through the PAYE system. This means that any tax liability arising from DSP income will be collected throughout the year via payroll, rather than the taxpayer paying the additional liability after filing their annual Form 11. This aligns with the current practice for those earning PAYE income and who are in receipt of income from DSP.

Revenue further advise that they receive information on the majority of taxable payments directly from DSP. This removes the need for some taxpayers to advise Revenue when they are in receipt of such a payment. Recipients of taxable payments that are not provided to Revenue by DSP are informed by DSP that they are required to declare this income to Revenue on their annual tax return.

An underpayment of tax in respect of DSP payments will typically arise where Revenue does not receive prompt notification of the amount or duration of such payments. Where a taxpayer files a PAYE Income Tax Return for a previous year and includes income from DSP payments which were not known to Revenue during that year, this will result in an underpayment of tax.

An underpayment of tax can also arise where the tax due on a DSP payment exceeds a taxpayer’s weekly tax credit. For example, a single person in receipt of a short-term payment, such as Jobseekers Benefit, of €244 per week will have their tax liability covered by their weekly tax credit of €76.92. Where that same individual moves to Pay Related Benefit of €450 per week, their weekly tax credit will not cover the additional liability, and this may result in an underpayment of tax at the end of the year.

Further information on the taxation of DSP payments and the list of DSP payments that need to be declared to Revenue can be found on Revenue’s website at: www.revenue.ie/en/jobs-and-pensions/taxation-of-social-welfare-payments/index.aspx.