The Gazette 1972

year will remove about 50,000 taxpayers from the in- come tax net. As a result of the new allowances a single man will pay £17.50 less in income tax, a married man without children will pay £24.50 less and a married man with four children will pay £52.50 or £1 a week less. Age relief The existing minimum allowances for the purposes of r.ge relief for persons aged 65 years are £150 for single and widowed person and £250 for married per- sons. As a further measure of relief in such cases, I propose to increase the minimum allowances to £175 and £300, respectively. The effect of this, together with the increases in the personal allowances which I have already announced, will be that the exemption limits for persons entitled to claim age relief will be raised from £399 to £474 in the case of single persons and from £424 to £499 for widowed persons. The exemption limit for married persons will be increase from £674 to £794. The cost of the increased age relief is estimated to be £120,000 in the current year and £140,000 in a full year. Incapacitated children I have had under consideration the question of relief for parents of children who are permanently incapaci- tated by mental or physical infirmity. While it is true that under the Health Services generous assistance is afforded in respect of such children, I have no doubt that in many such cases the parents are faced with substantial additional costs. In recognition of this I pro- pose to increase the child allowance in these cases by £50. This is in addition to the general increase of £20 which I have just mentioned, so that the total increase in these cases is £70. Health expenses At present relief for income tax purposes is provided in respect of medical expenses exceeding £50 but not exceeding £500 a year per qualified person. I am satis- fied that genuine hardship occurs where heavy medical expenses are incurred in excess of the upper limit, par- ticularly by the aged who may not be able to obtain medical insurance. The number of cases involved is small. I propose, therefore, to abolish entirely the upper limit of £500. Credit Unions Because of the important social role of the credit union movement, which is still in the early stages of de- velopment, I have, as Deputies are aware, been exam- ining the present position, under tax law, of credit unions. I propose to recognise their unique position by providing, in the Finance Bill, that operating surpluses of credit unions will be exempt from income tax and corporation profits tax. The exemption will apply to existing unions from the date of their registration as credit unions. The cost of these three reliefs—for incapacitated children, health expenses and credit unions—will be £150,000 this year and £170,000 in a full year. Rate of Company Taxation I announced in my statement to the House on the economic situation on 27th October last that the in- crease in company taxation which was imposed in Octo- ber, 1970, would be removed in two stages, one-half in 1972-73 and the balance in 1973-74. In view of the urgent need to stimulate economic activity and to assist industry in preparing for EEC membership, I have de- 141

as children adopted under our laws. Representations have been made to me that there should be a body, like the Income Tax Appeals Com- missioners, to determine death duty appeals in relation to the valuation of non-quoted company shares so that the cost and delays involved in taking appeals to the courts might be avoided. There is already such an appeal body in existence for the valuation of real and leasehold property. I have decided to extend the juris- diction of the Income Tax Appeal Commissioners to cover appeals in the field of valuation of non-quoted company shares. The appropriate provisions will be included in the Finance Bill. System of company taxation The final item in this field to which I shall refer is the comprehensive examination of our system of com- pany taxation which is nearing completion. In my finan- cial statement last year, I indicated that I expected to publish, before the end of the year, the results of some aspects of this examination together with my views on the conclusions to be drawn from these results. This work involved a full statistical survey of companies in- cluding their capital structure, profits and dividends. This survey has now been completed. I expect to receive the report of the Revenue Commissioners within the next month or so and I hope to issue a White Paper on the subject in the summer. While the need to in- crease domestic economic growth and savings will be of paramount importance in determining the most ap- propriate system for the taxation of companies and dividends, I must also bear in mind likely develop- ments in this field within the European Economic Com- munity. Income tax allowances The Government have, for some time past, been concerned about the increasing burden of income tax, in particular on lower incomes. The incidence of income tax is relatively heavy in this country and in recent years the proportion of the total tax being paid by salary and wage earners has been increasing significantly. Relief for income tax payers, has, therefore, figured high on the list of the Govern- ment's priorities in the taxation field and they'have decided that this year a substantial alleviation of the burden should be provided. Personal allowances The main income tax personal allowances were last increased in 1969. As is generally known, a major obstacle in the way of giving significant increases in these allowances is the cost involved, which is very substantial. However, I feel that the time has now come when further relief from the burden of personal tax- ation must be provided. I, therefore, propose to increase the personal allowances for single persons by £50 to £299, for widowed persons by £50 to £324 and for married person by £70 to £494. In addition, each of the existing child allowance will be increased by £20. This means that single and widowed persons with earnings below £449 and £474, respectively, will not be liable to tax. A married man will be exempt on earnings below £744. A married man with four children of whom two are under 11 years and two are between 11 and 16 years will be exempt if his earnings do not exceed £1,444. These increases which, it is estimated, will cost £11 million in the current year and £13 million in a full