THE GOVERNMENT is understood to have taken a last-minute decision not to end tax relief measures benefiting parents who pass sites to children in the Finance Bill, to be published today.
The Green Party wanted capital gains and stamp duty exemptions on the disposal of sites to children to be abolished, while the Commission on Taxation also recommended they be discontinued.
The possibility of removing the measures was discussed at Government level as recently as Tuesday, when Cabinet signed off on the Finance Bill, but a decision was taken to retain them.
However, other tax relief schemes will be removed, as the Commission on Taxation has recommended, and further schemes will be curtailed.
The Revenue Commissioners will be given additional powers and fines applicable under custom and excise laws will be increased, while measures aimed at stimulating economic activity will also be introduced.
Fine Gael TD Michael D’Arcy, from Wexford, yesterday expressed concern at speculation that the scheme allowing parents to pass sites to children tax-free under certain conditions would be discontinued.
Speaking in the Dáil, Mr D’Arcy said there were reports that Minister for Finance Brian Lenihan was “getting ready for another attack upon rural Ireland”. Taoiseach Brian Cowen responded that he could not comment on rumours, adding: “However, the deputy will see on publication of the Bill that rural Ireland has been well protected.”
Mr D’Arcy claimed the Greens had “set their sights on this time-honoured practice which sustains rural communities and families”, in a statement released after the Dáil exchange. The Green Party is opposed to the continuation of the measures on the grounds that they encourage one-off rural housing and are inequitable.
The Commission on Taxation, in its report published last year, said the exemption conferred an advantage on people in possession of land assets which they were in a position to dispose of with a resultant financial gain.
“We consider that equity requires that the gain should be treated in the same manner as would a gain from the disposal of any other asset and be taxed accordingly,” the report said.
Speculation that the measures could be discontinued in the Finance Bill has prompted some advisers to recommend people act promptly if they were considering giving a site to a child.
The Finance Bill will give full details of the Irish domicile levy of €200,000 per annum, aimed at wealthy non-resident Irish individuals.
It will also set out the full details of changes to mortgage interest relief outlined in Mr Lenihan’s budget speech. He said where entitlement to the relief would expire in 2010 or after, homeowners in negative equity would continue to receive it up to the end of 2017, when it will be abolished entirely.
Mr Lenihan also indicated he would bring forward tax changes to “strengthen Ireland’s competitive edge” in the international funds industry.
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