Michael P. Kitt
Question:81 Mr. M. Kitt asked the Minister for Finance if a tax deduction has been considered for farmers who buy extra quota under certain milk quota limits; and if he will make a statement on the matter. [3717/97]
Written Answers. - Tax Reliefs.
The matter has been considered and it was decided that no change be made in the treatment for milk quota purchase expenditure. Milk quotas are treated as capital assets for tax purposes. The proceeds of sale of a quota are, therefore, treated as a capital receipt and as such are liable for taxation as a capital gain rather than as income. If the cost of acquiring a milk quota was to be allowed as a trading expense for the buyer, it would logically follow that the payment for the quota should be treated as income in the hands of the seller. It would clearly be inappropriate to continue to treat the quota as a capital item for the farmer selling it and as a trading expense for the farmer buying it.
Bertie Ahern
Question:82 Mr. B. Ahern asked the Minister for Finance the cumulative tax relief resulting from the 1997 budget by the end of Programme 2000 assuming that tax relief announced in the 1997 budget is continued in the 1997 and 1998 autumn budgets; and if this figure is calculated in the same way as calculations of cumulative tax relief under the Programme for National Recovery, the PESP and the PCW. [3718/97]
The full year cost of the income tax, levies and employees' PRSI element of the personal tax reductions introduced in the 1997 budget was £393 million. This sum does not include the £14 million in revenue arising from the final phase of standard rating of mortgage interest relief introduced in the 1994 budget which would have to be taken into account to compare with the costing of the tax reliefs under previous national programmes provided in reply to the Deputy's Questions Nos. 110 and 111 on 26 November 1996. This £14 million was already taken into account in the tax revenue receipts published before the budget in the White Paper on Receipts and Expenditure for 1997.
It is not possible to provide a cumulative cost for Partnership 2000, as was done for earlier national programmes, until such time as the 1998 and 1999 budgets have been introduced. However, as the Deputy is aware, Partnership 2000 in paragraph 3.9 states that the Government will introduce personal tax reductions over the three years of £900 million on a full year basis.