The Gazette 1993

GAZETTE

DECEMBER 1993

N E W S

Budget Submission Calls for Abolition of 1% Levy

Capital Acquisitions Tax The submission argues that section 121 and section 123 of the Finance Act, 1993 are damaging, superfluous, and should be repealed, since they create a totally artificial situation in relation to shares in private companies. The Taxation Committee further recommends that aggregation should be restricted to twelve years maximum; the introduction of a small inheritance tax exemption; that the limit for the small gifts exemption should be increased to £2,000; that a form of business relief similar to agricultural relief should be introduced for self-employed business, trading companies and holding companies of trading companies; and that additional agricultural relief granted by the Finance Act, 1993, should not be lost by reason of the death of the disponer within two weeks of the gift. Stamp Duty The submission notes that although a Stamp Duty appeals structure has been promised in the past, an appeals system has not been established as yet, and thus, an appeal in relation to any i matter concerning Stamp Duty must be ! made to the High Court. The submission also recommends that assignments of debts should not be liable for Stamp Duty; that the contents of a dwelling house, if not stated in a deed, should not be aggregated for Stamp Duty threshold purposes where they do not exceed 5% second-hand dwelling houses (subject to a limit of £100,000 purchase price) should pay only 1% Stamp Duty; that the Stamp Duty exemption should be restored for exchanges where there is no premises or dwelling house. It is also recommended that in order to facilitate the early retirement of farmers and the transfer of land to the next generation, a transfer of agricultural land between parent and of the total price of the dwelling house; that first-time buyers of

In a submission to the Minister for Finance on the forthcoming budget (1994) the Taxation Committee of the Law Society has called for the abolition of the 1 % Income Tax levy, has suggested an appeals system for Stamp Duty and has argued that sufficient time must be allowed for the debate and examination on Finance Bills before they are passed into law. The submission notes that over the last three or four years, Finance Bills have become more technical and are placing an increasing burden on the taxpayer. The fact that such technical legislation is presented to the public approxi- mately four or five weeks before it becomes law, does not give sufficient time to consider the complexities of the legislation. Frequently, Finance Bills are passed under a motion of guillotine. The Society's submission suggests that two Finance Bills should be published: the first would deal with budgetary matters and could be passed within four months of budget day; the second would deal with technical matters and anti-avoidance legislation, and would not be passed earlier than four months after its publication in order to give time to the various professional bodies to consider its provisions and make recommendations. Employment Following on its submission on the 1993 Budget, the Taxation Committee is recommending again that employment creation be treated in the same way as a "designated area". This would mean that a double allowance would be given for the expenditure relating to every new unit of employment created. Such a measure would help indigenous industry in the State as it is very difficult for such industry to avail of any of the tax concessions which are available to foreign industries setting up here.

child should be at a 1% rate.

Probate Tax The submission reiterates the Society's total opposition to the Probate Tax. However, the Taxation Committee argues that if the tax is not going to be abolished, a complete exemption should, at least, be granted for widows and minor children, otherwise severe hardship will occur. Income Tax The submission argues that the 1% income levy operates as a tax on employment and should, therefore, be abolished and it suggests that the limit for tax relief of 15% of income for contributions to pensions should be increased for people on low to medium incomes. This would facilitate those who make a late start in contributing to a pension fund. Value Added Tax It is argued that Value Added Tax should be at the lowest rate for the following legal services: family law; criminal litigation; civil litigation in the District and Circuit Court; purchase of residential property for less than £100,000 and voluntary transfer of agricultural land or business premises from parent to child, and agricultural property. Residential Property Tax It is submitted that it should be defined clearly that the tax is not a charge under any circumstances (except where there is a voluntary conveyance between husband and wife) under section 72 of the Registration of Title Act, 1964. Where a life tenant is liable for Residential Property Tax, the owner of the remainder interest should not be liable for the tax also. The submission was sent to the Minister for Finance, Bertie Ahem, TD, in early November, 1993.

•

413