Written Answers Nos. 201-220
202. Deputy Carol Nolan asked the Minister for Finance how he intends to apply the test on the person transferring the land within the context of the agriculture relief changes announced in Budget 2025; and if he will make a statement on the matter. [41370/24]
View answerSections 100 and 101 of the Finance Bill 2024 (as initiated) provide for the introduction of a revised form of relief from Capital Acquisitions Tax (CAT) for gifts and inheritances of agricultural property where certain conditions are met.
Subject to the enactment of these provisions in the Bill, the revised agricultural relief will be provided for in a new section 89A of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 and will apply to gifts and inheritances of agricultural property taken on or after 1 January 2025. It will replace the existing agricultural relief that is provided for in section 89 of the CATCA 2003, which will cease to apply from that date.
The revised agricultural relief, while similar in many respects to the existing agricultural relief, differs in certain respects.
A key change is the proposed introduction of two additional qualifying conditions, which relate to the ownership and use of the agricultural property prior to the date of the gift or inheritance. The first is that the person from whom the beneficiary takes the gift or inheritance (the “disponer”) must have owned the agricultural property for a minimum period of 6 years prior to the date of the gift or inheritance. The second is that the agricultural property must have been actively farmed by the disponer or a person to whom the property was leased in the 6 years prior to the date of the gift or inheritance.
The beneficiary of the gift or inheritance will be expected to retain appropriate evidence confirming that these qualifying conditions have been met.
The revised relief also introduces greater flexibility in how a disponer, or beneficiary as the case may be, satisfies the “active farmer” requirement. Section 89A will provide that this requirement may be met where part of the agricultural property is actively farmed and the remaining part is leased to an active farmer. Currently, where agricultural land is leased, it must amount to “substantially the whole” of the agricultural land owned by the farmer. Revenue accepts that substantially the whole of the property means at least 75% of the property by value. The revised relief facilitates more flexible use of the land by enabling a disponer or beneficiary to use a combination of personal active farming and leasing to an active farmer in their chosen proportion, once all of the agricultural property is used for the purposes of farming.
To ensure that the introduction of this new requirement does not have an adverse impact on existing family farm arrangements, section 100 of the Bill includes a transitional provision. This transitional provision applies for land held by the disponer before 1 January 2025, the period during which the new requirement must have been met will commence on 1 January 2025 and end on the date the gift or inheritance is taken. For example, where agricultural property is gifted on 1 March 2025, the disponer must meet the new active year conditions for the period 1 January 2025 to 1 March 2025 i.e., 2 months and as long as the disponer owned the relevant land before 1 January 2025 the disponer will be considered to have met the six year holding requirement.
I am advised by Revenue that they will publish detailed guidance, including examples, setting out how the revised agricultural relief will be applied in practice, once the Bill has been enacted.
204. Deputy John Paul Phelan asked the Minister for Finance if his Department is aware of the reports that social media platforms are possibly being used to illegally offer the sale of non-duty-paid tobacco products; and what measures are being put in place to detect and crack-down on such activity. [41429/24]
View answerI am advised by Revenue that it uses a range of measures to tackle the sale of illicit cigarettes, including online sales. At the core of these measures is identifying and targeting the smuggling of illicit tobacco products into the State, with a view to disrupting the supply chain, seizing the products and, where possible, prosecuting those involved. Revenue’s strategy involves developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies, which includes analysis of online activities, and ensuring the optimum deployment of resources on a risk-focused basis.
The smuggling of tobacco products has a transnational and cross border dimension and, in addition to Revenue’s ongoing cooperation with An Garda Síochána in this area, Revenue also works closely with its counterparts in other jurisdictions including colleagues in Northern Ireland through the Cross Border Joint Agency Task Force (JATF), and international bodies including OLAF (the EU’s anti-fraud agency), Europol and the World Customs Organisation.
Revenue regularly carries out analysis of online activity related to the sale of illicit tobacco products. When such activity is discovered, Revenue takes the appropriate steps to identify and prosecute such individuals and also seize the illicit goods. I am pleased to say that Revenue has achieved considerable success in tackling the sale of illicit tobacco products and products being sent via parcel post, with 724 seizures of cigarettes and 468 seizures of tobacco in 2023, with a combined value of over €2.7m and 483 seizures of cigarettes and 301 seizures of tobacco to the end September this year, with a combined value of nearly €2.6m.
In addition to this Revenue have secured 45 summary convictions with fines of €101,500 handed out in 2023 and 29 summary convictions with fines of €83,250 handed out to the end of September this year, related to the sale of illicit tobacco products. I am aware that Revenue monitors trends in the illicit tobacco trade on an ongoing basis and adjusts its actions and redeploys its resources to counter any new developments or methodologies employed by the criminal gangs involved in that trade.
I am satisfied that combating the threat that the illicit tobacco trade poses to legitimate business, consumers, and the Exchequer continues to be a priority for Revenue.
Finally, if businesses or members of the public have any information regarding the sale or supply of illicit tobacco products, they can contact Revenue on the confidential free phone number 1800 295 295.
205. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a 0.5% reduction in the 0.5, 2%, 4%, 8% and 11% rates of USC post the enactment of measures announced in Budget 2025. [41490/24]
View answer206. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a €1,000 increase in the income band of the 0.5, 2%, 4%, 8% and 11% rates of USC post the enactment of measures announced in Budget 2025. [41491/24]
View answer207. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a €1,000 increase in the reduced rate of USC 0.5% and 2% bands post the enactment of measures announced in Budget 2025. [41492/24]
View answer208. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a 0.5% reduction in the 0.5%, 2% band of the reduced rate of USC post the enactment of measures announced in Budget 2025. [41493/24]
View answer209. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost to abolish the USC surcharge of 3% on non-PAYE income of more than €100,000 post the enactment of measures announced in Budget 2025. [41494/24]
View answer210. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a €50 increase in the personal tax credit, employee PAYE, earned income, home carer tax, single person child carer, incapacitated child carer, blind person tax credits post the enactment of measures announced in Budget 2025, in tabular form. [41495/24]
View answer211. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a €1,000, €2,500, €5,000, €10,000 and €15,000 increase in the single person and married one earner standard rate income tax bands post the enactment of measures announced in Budget 2025. [41496/24]
View answer212. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of a €1,000, €2,500, €5,000, €10,000 and €15,000 increase in the higher rate of income tax bands post the enactment of measures announced in Budget 2025. [41497/24]
View answerI propose to take Questions Nos. 205 to 212, inclusive, together.
I am advised by Revenue that following the announcement of Budget 2025 on the 1st of October 2024, Revenue is in the process of updating their income tax estimates model to take account of these changes.
Once finalised, Revenue will publish a revised Ready Reckoner, which will set out the costs and/or yields associated with various potential changes to tax policy. This will be published by the 25th of October 2024 and will be available on the Revenue website at
www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx.
Once published, Revenue will then be in a position to provide estimates for 2025 relating to changes to income tax policy, on a post-Budget 2025 basis.
213. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of adjusting entrepreneur relief from a 'per venture' limit to a 'lifetime limit' post the enactment of measures announced in Budget 2025. [41498/24]
View answerRevised Entrepreneur Relief is provided for in Section 597AA of the Taxes Consolidation Act 1997. It provides that a reduced rate of 10% of Capital Gains Tax (CGT) applies in respect of a chargeable gain or chargeable gains on a disposal or disposals of qualifying business assets by an individual up to a lifetime limit of €1 million. Any chargeable gain in excess of the €1 million lifetime limit is to be taxed at the standard rate of CGT (currently 33%).
As the relief currently applies up to a lifetime limit of €1 million, I understand the Deputy is asking the estimated cost of adjusting the relief from a ‘lifetime limit’ to a ‘per venture’ limit. I am advised by Revenue that, as the relevant tax returns do not include information regarding the overall portfolios of qualifying business assets held by entrepreneurs or their likely patterns of disposal, data is not available from which to estimate the likely cost of the change outlined by the Deputy.
214. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost to increase the maximum value of share options allowable under KEEP from 100% of a recipient's salary to 150% post the enactment of measures announced in Budget 2025. [41499/24]
View answerSection 128F of the Taxes Consolidation Act (“TCA”) 1997 provides for the Key Employee Engagement Programme ("KEEP”), which came into effect on 1 January 2018. The aim of the incentive is to support SMEs in Ireland in competing with larger enterprises to recruit and retain key employees, by way of a targeted share option programme. Where the provisions of section 128F TCA 1997 are met, an exemption from income tax, USC and PRSI applies to a qualifying employee on any gain realised on the exercise of a qualifying share option.
In order to qualify for this beneficial tax treatment, there are a number of conditions to be satisfied in relation to the employee, the company and the share options. In order to be considered a ‘qualifying share option’ the share to be acquired must be ordinary fully paid up shares and the option must be held by the employee for a minimum period of 1 year from the date of grant. The option must also be exercised within 10 years of the grant of that option.
In addition, section 128F(1) provides for a restriction on the total market value of all shares in respect of which qualifying share options can be granted in the company to an employee or director. With effect from 1 January 2019, this value cannot exceed:
€100,000 in any one year of assessment,
€300,000 in all years of assessment, or
100% of the qualifying individual’s annual emoluments in the year of assessment in which the qualifying share option is granted.
Resultant from the conditions above, I am advised by Revenue that it is not possible to estimate the cost of increasing the cap in relation to the annual emoluments of the qualifying individual – (iii above). There are a number of reasons for this-
• it is not possible to predict the uptake on the KEEP scheme – as noted above, the share option must be exercised within 10 years of the grant of the option, however there is no obligation on the employee to exercise such an option,
• Revenue cannot predict future annual emoluments in respect of any individual,
• it is not possible to foresee the number or value of shares that a ‘qualifying company’ may be willing to allocate under the KEEP scheme,
• it is also impossible to ascertain whether a company or an individual will continue to be “qualifying” for the purposes of KEEP for any subsequent years of assessment, and
• the restrictions imposed on the total market value of shares cannot be looked at in isolation for any particular year. For instance, in order to determine whether an option granted in 2022 is a ‘qualifying share option’ for the purposes of KEEP, it needs to meet all the relevant conditions including restrictions (i.e., i, ii and iii above). These restrictions refer not only to the year of assessment 2022, but also to any previous years of assessment since the inception of KEEP in 2018 or the first year in which the company operated the scheme. For instance, in order to determine whether an option is qualifying for 2022, any options granted since 2018, or the first year the scheme was operated by the company, will have to be considered to ascertain that the €300,000 threshold in respect of the total market value in all years of assessments is met.
I am advised by Revenue that the estimated cost of increasing the maximum value of share options allowable under KEEP from 100% to 150% of an individual’s salary is not available. However, a cost to the exchequer figure in respect of revenue foregone and employer PRSI exemption on KEEP, under the current conditions of the scheme is available. The cost to the exchequer of operating KEEP is €1.6m for 2022, which is the most recent year published in the annual Cost of Tax Expenditures table available at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx . This is a maximum cost, which is calculated with reference to the marginal rates of income tax (40%) and USC (8%), and employee PRSI at 4%.
In respect of the employer PRSI exemption that applied in respect of KEEP for the year 2022, this cost is estimated at €0.3m, calculated with reference to an employer PRSI rate of 11.05% for 2022. As the rate of employer PRSI depends on an employee’s weekly earnings, it is not possible to provide an exact figure. It is worth noting that the 11.05% rate of employer PRSI has increased to 11.15%, effective from 1 October 2024. The rate will further increase to 11.25%, effective from 1 October 2025.
As announced in my Budget day speech, a comprehensive review of the taxation of share based remuneration, incorporating the responses received to a public consultation, has been published and its recommendations will be considered in due course.
215. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost to provide a €100 tax credit per person from the age of 16 to 20 for proof of continued club membership of a sport club post the enactment of measures announced in Budget 2025. [41500/24]
View answer216. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of providing a €100 tax credit for proof of a new membership of a gym and/or exercise class post the enactment of measures announced in Budget 2025. [41501/24]
View answerI propose to take Questions Nos. 215 and 216 together.
I am advised by Revenue that, membership of clubs, gyms etc. is not reported to it on any tax returns and, accordingly, Revenue does not have data from which to provide estimates of the cost of the proposed changes outlined by the Deputy.
217. Deputy Jim O'Callaghan asked the Minister for Finance with regard to capital acquisitions tax the estimated cost of a further €65,000 increase in Group A, a further €7,500 increase in Group B and a further €3750 increase in Group C thresholds post the enactment of measures announced in Budget 2025. [41502/24]
View answerI am advised by Revenue that the estimated cost of a further €65,000 increase in Group A, a further €7,500 increase in Group B and a further €3750 increase in Group C thresholds post the enactment of measures announced in Budget 2025 is €74.1m per annum.
A breakdown of this is shown in Table 1 below:
Table 1: Breakdown of CAT Costing
|
Category |
€M |
|
Group A |
47.7 |
|
Group B |
22.7 |
|
Group C |
3.7 |
|
Total |
74.1 |
An update of the Ready Reckoner, which enables calculation of the cost or yield arising from a range of potential changes to tax charges, is due to issue in the coming weeks on the Revenue website at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx.
218. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost of maintaining the 9% VAT rate on electricity for a full year post the enactment of measures announced in Budget 2025. [41503/24]
View answerI am advised by Revenue that traders are not required to separately identify the VAT yield generated from the supply of specific goods and services on their periodic VAT returns. Therefore, it is not possible to provide the VAT yield on all fuel and energy related products and services using taxpayer information alone. However, using Revenue and third-party data sources, a tentative estimate of the full year cost of maintaining the 9% VAT rate on electricity at current prices and consumption volumes would be in the region of €140m.
219. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost to introduce a €1,000 tax credit for legal, surveying and valuation fees for first time buyers post the enactment of measures announced in Budget 2025. [41504/24]
View answerI am advised by Revenue that for 2023, the latest year for which fully analysed data are available, based on stamp duty returns for residential property purchases made by persons identifying themselves as first-time buyers, there were 19,417 such returns associated with 32,013 people.
If an income tax credit of €1,000 for first-time buyers was made available on the basis of a single credit per purchase, the maximum amount that could be claimed would, therefore, be in the order of €19.5m. Applied on a per purchaser basis, the maximum amount claimed would be in the order of €32m. These estimates assume no change in taxpayer behaviour.
The actual cost associated with this credit would depend on the income levels of the purchasers, and their associated tax liability, which would dictate their ability to absorb this additional tax credit.
220. Deputy Jim O'Callaghan asked the Minister for Finance the estimated cost to increase the renters tax credit by €250, €500, €1,000 post the enactment of measures announced in Budget 2025. [41505/24]
View answerI am advised by Revenue that the table below sets out the estimated costs of the proposals outlined by the Deputy. These costs are done on a post-Budget 2025 basis (i.e. the additional over the levels of the relief as increased in Budget 2025).
|
Proposed Credit Value in 2025 |
Estimated Additional Cost €m |
|
€1,250/€2,500 |
50 |
|
€1,500/€3,000 |
95 |
|
€2,000/€4,000 |
160 |
Note: figures are rounded to the nearest €5m.
