Written Answers - Tax Reliefs.

Thursday, 5 February 2004

Dáil Eireann Debate
Vol. 579 No. 3

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  68.  Mr. R. Bruton   Information on Richard Bruton  Zoom on Richard Bruton   asked the Minister for Finance  Information on Charlie McCreevy  Zoom on Charlie McCreevy   the amount of pension relief availed of by taxpayers classified by income range, itemising both the amount of tax relief received and the number of taxpayers in each income range. [3455/04]

Minister for Finance (Mr. McCreevy): Information on Charlie McCreevy  Zoom on Charlie McCreevy  As part of my reforms in the pensions area and with the aim of encouraging more people to increase their pension coverage, I increased the contribution limits for retirement annuity contracts in section 19 of the 1999 Finance Act for the tax years 1999/2000 and onwards. The new limits ranged from 15% of net relevant earnings for contributors up to 30 years of age to 30% of net relevant earnings for contributors over 50 years of age. Prior to this, the limit was 15% for persons up to the age 55 and 20% for those aged 55 or over. The increase was particularly significant for [899]those over the age of 50, who would normally be in a much better position to fully fund their pensions than those in younger age groups who might not be able to contribute as much as they would like due to other family and financial commitments. At the same time, I also imposed an annual contribution earnings cap of £200,000 which is now €254,000. There had been no such earnings cap prior to this and the cap has not been increased since 1999.

Similar contribution limits and an earnings cap also apply in the case of the new PRSAs which were introduced by the Pensions Amendment Act 2002.

I provided for the same higher limits for employee contributions to occupational pension [900]schemes in section 10 of the 2002 Finance Act. The limits in these schemes are subject to the same annual earnings cap of €254,000 and contributions have also to be in conformity with the overall existing maximum pensions benefit rules applied by the Revenue Commissioners.

I am informed by the Revenue Commissioners that the only relevant information available is in respect of income tax relief allowed for contributions to retirement annuity contracts for the income tax year 2000/01, which is available to the self-employed and to employees not in occupational pension schemes.

The information is contained in the following table. Corresponding information is not available in respect of contributions to occupational pension schemes.

Range of Gross Income Totals
From To Number of claimants Amount of deduction Reduction in tax
7,000 1,177 1,955,819 78,893
7,000 8,000 445 460,313 58,009
8,000 9,000 482 517,362 72,595
9,000 10,000 605 677,315 104,375
10,000 12,500 2,085 2,556,593 414,447
12,500 15,000 3,018 4,048,740 716,147
15,000 17,500 3,748 5,251,284 995,191
17,500 20,000 4,534 6,702,992 1,383,079
20,000 22,500 5,039 7,913,913 1,827,405
22,500 25,000 5,170 8,673,220 2,401,776
25,000 27,500 5,222 9,570,368 2,885,250
27,500 30,000 4,802 9,484,550 2,925,870
30,000 32,500 4,656 9,943,080 3,055,705
32,500 35,000 4,263 9,537,566 2,926,141
35,000 37,500 4,130 9,663,805 2,903,120
37,500 40,000 3,933 10,038,129 3,257,816
40,000 42,500 3,631 9,501,707 3,293,735
42,500 45,000 3,435 9,713,142 3,530,458
45,000 47,500 3,086 9,011,157 3,504,334
47,500 50,000 2,914 9,281,690 3,636,036
50,000 60,000 9,270 35,138,405 14,619,369
60,000 75,000 8,409 43,294,064 18,686,681
75,000 100,000 6,608 50,258,905 21,959,343
Over 100,000 11,041 250,248,583 109,779,797
Totals 101,703 513,442,702 205,015,573

[899]

  69.  Mr. R. Bruton  Information on Richard Bruton  Zoom on Richard Bruton   asked the Minister for Finance  Information on Charlie McCreevy  Zoom on Charlie McCreevy   the total value of funds in tax exempt managed funds such as approved retirement funds. [3456/04]

Minister for Finance (Mr. McCreevy): Information on Charlie McCreevy  Zoom on Charlie McCreevy  There is no requirement in law for the managers of tax exempt managed funds such as approved [900]retirement funds to provide the Revenue Commissioners with details of the amount of funds held in such investment vehicles.

  70.  Mr. R. Bruton  Information on Richard Bruton  Zoom on Richard Bruton   asked the Minister for Finance  Information on Charlie McCreevy  Zoom on Charlie McCreevy   if research has been done regarding the number of taxpayers receiving pension relief in any year in excess of €100,000. [3457/04]

Minister for Finance (Mr. McCreevy): Information on Charlie McCreevy  Zoom on Charlie McCreevy  As part of my reforms in the pensions area and with the aim of encouraging more people to increase their pension coverage, I increased the contribution limits for retirement annuity contracts in section 19 of the 1999 Finance Act for the tax years 1999/2000 and onwards. The new limits ranged from 15% of net relevant earnings for contributors up to 30 years of age to 30% of net relevant earnings for contributors over 50 years of age. Prior to this, the limit was 15% for persons up to the age 55 and 20% for those aged 55 or over. The increase was particularly significant for those over 50, who would normally be in a much better position to fully fund their pensions than those in younger age groups who might not be able to contribute as much as they would like due to other family and financial commitments. At the same time, I also imposed an annual contribution earnings cap of £200,000 which is now €254,000. There had been no such earnings cap prior to this and the cap has not been increased since 1999.

Similar contribution limits and an earnings cap also apply in the case of the new PRSAs which were introduced by the Pensions Amendment Act 2002.

I provided for the same higher limits for employee contributions to occupational pension schemes, in section 10 of the 2002 Finance Act. The limits in these schemes are subject to the same annual earnings cap of €254,000 and contributions have also to be in conformity with the overall existing maximum pensions benefit rules applied by the Revenue Commissioners.

I am informed by the Revenue Commissioners that statistics are only available in respect of income tax relief allowed for contributions to retirement annuity contracts. On the basis of these statistics there were six claimants who each received tax relief of an amount in excess of €100,000 for the income tax year 2000/01 in respect of their contributions to retirement annuity contract schemes. Statistics are not available in respect of contributors to occupational pension schemes claiming tax relief in excess of €100,000 on their contributions.

  71.  Mr. Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for Finance  Information on Charlie McCreevy  Zoom on Charlie McCreevy   the plans he has to introduce capital gains tax and stamp duty relief for elderly people downsizing in accommodation; and if he will make a statement on the matter. [3506/04]

Minister for Finance (Mr. McCreevy): Information on Charlie McCreevy  Zoom on Charlie McCreevy  If tax concessions were introduced for older persons wishing to trade down, it would have the effect of increasing the supply of larger (and generally more expensive) houses relative to demand. This would be of benefit to people at the top end of the market. However, the demand for property relative to supply at the lower end of the market would increase and this would adversely affect first-time buyers, in particular, who would have to compete for such houses with a larger number [902]of people consequently. Persons trading down normally have the cash up front to pay for smaller houses and would generally have no stamp duty liability on a new house or a small liability on a second hand property.

It should also be noted that people trading down can already avail of the principal private residence relief which is a substantial exemption from capital gains tax. If the house has been occupied for the full period of ownership, full exemption applies. Otherwise, the relief granted is in proportion to the period of occupation over the entire period of ownership. This relief, combined with the capital sum received on the sale, means that most older people with large homes already have sufficient financial incentive to trade down.

I consider these reliefs to be sufficiently generous and appropriate and accordingly, I have no plans to introduce further concessions for any category of individual wishing to trade down.

  72.  Mr. Durkan  Information on Bernard Durkan  Zoom on Bernard Durkan   asked the Minister for Finance  Information on Charlie McCreevy  Zoom on Charlie McCreevy   if a tax refund in respect of rent paid will be made in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [3542/04]

Minister for Finance (Mr. McCreevy): Information on Charlie McCreevy  Zoom on Charlie McCreevy  I am advised by the Revenue Commissioners that the taxpayer may make a claim for rent paid in respect of private rented accommodation. Form rent 1 was issued to the taxpayer today outlining the information required to process the claim. The information may be supplied by completion of the form rent 1 or by telephone at 1890-444425.


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