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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
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.gerelief 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-
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