The Gazette 1974
CORRESPONDENCE
Income Tax (2) Exempt all gains realised on a principal private residence standing on grounds of up to one acre. Annual Wealth Tax The following changes will be made : (1) There will be a single rate of 1 p.c. instead of the rates of p.c. to 2£ p.c. indicated in the White Paper. (2) Exemption thresholds will be increased to £100,000 for a married man and to £70,000 for a single person, instead of thresholds of £60,000 and £40,000 in the White Paper. In addition, there will be an allowance of £2,500 for each minor child and a new exemption threshold—of £90,000—for widowed persons. (3) These thresholds will be revised every three years to take account of inflation, and such valuations will remain valid for three years. (4) Three new exemptions will be introduced—1, Principal private residence standing on grounds of up to 1 acre and normal contents; 2, Livestock and bloodstock, and, 3, Pension rights. (5) Instead of the test for liability in respect of what might be called "world property" being domicile or ordinary residence as proposed in the White Paper, it is intended to apply a test of domicile and ordinary residence. (6) Other aspects of wealth tax to which consideration is being given include the form of relief appro- priate for productive capital used in business. Be- cause of varying needs of industries and businesses it is not easy to define a suitable code for universal application. Further discussions will be held with the interests con- cerned to identify special problems. (1) Contemporaneously with the introduction of wealth tax, the top rate of income tax will be reduced from 80 p.c. to 70 p.c. and this will apply to tax- able incomes from £10,350 instead of £8,350, as at present. This will be achieved by substituting for the pre- sent two bands of taxable income at 50 p.c. and 65 p.c., three bands of £2,000 each, chargeable at rates of 45 p.c., 55 p.c. and 65 p.c. Relief will be given to all taxpayers at present chargeable to in- come tax at a rate of 50 p.c. or over. (2) Despite the modification in the income tax rates, higher thresholds and lower rate of wealth tax, the combined rate of income and wealth tax might, in some cases, still absorb an unacceptably high pro- portion of total income. Various ways of meeting this problem are being examined. Some overall limit might be set on the percentage of income to be taken by these two taxes, but with the proviso that any consequential abatement of wealth taxation would not reduce the Wealth Tax pay- able below a certain percentage of the assessed liability. 139
7th May 1974
Private Mr- R. Ryan, T.D., Minister for Finance, government Buildings, J/Pper Merrion Street, Dublin 2.
re Capital
Taxation
D e a r Mr. Ryan, I he Incorporated Law Society is deeply concerned the proposals in the White Paper on capital taxation hat certain capital taxes should be charged on pro- y. . As a practising Solicitor in the past you will appre- . Ia te personally that such a provision in legislation Jtoplimenting your proposals would create the greatest 'tficulty with regard to administration and would in- . ee d make the completion of sales of property a virtual ^possibility at present. You will recollect the difficulty in obtaining Certi- Jteates under Section 6 of the Finance Act 1928 with ^?ard to Schedule "A" Income Tax, until this was "fished some time ago. I he amounts then involved were very small and it as usually possible to deal with the situation by the "ncitor for the Purchaser retaining a small sum until e Section 6 clearance Certificate was available from . e Revenue Commissioners when the sum was re- ted to the Vendor, "bt Section 6 Certificate usually took months to • ^ he Society urge strongly upon you that you should " e r abandon or at least postpone, until adequate achinery is available, the provision that any capital l< *Xes „i 1 — * Posit; e s should be charged on property and permit the "ion to remain that capital taxes would be the p( *sonal liability of the Vendor. ^A decision could always be made to introduce a aar Re Clause in later legislation if it was felt necessary, some experience of operation had been gained, of V , e r e a t P r e s e n t n o machinery for the furnishing . Certificates of Discharge by the Revenue Commis- n ers and there are already sales which it is not sible to close as the Purchasers are not prepared to ^ Ce pt property subject to a possible claim by the e venue Commissioners for tax unpaid by the Vendor, r *he Society regards this separate issue as very urgent of ^ L , P 0 ' n t of view of the every day administration toe property market particularly in relation to the Mhase of private dwelling houses. y ours faithfully, James J. Ivers, Director-General HOW THE NEW LEVELS ARE INTENDED TO OPERATE fj a pital Gains Tax 18 intended to : ' Reduce the rate from 35 p.c. to 26 p.c.
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