Vol. 506 No. 4
72 Mr. R. Bruton asked the Minister for Finance if his attention has been drawn to the fact that seamen working with Irish Ferries do not qualify for the recent tax concession which he awarded; and if he will relax the qualifying days needed to admit them. [15657/99]
The 1998 Finance Act provided for a new seafarers tax allowance of £5,000 per annum. This allowance is available in respect of seafaring earnings, and is conditional on a seafarer being at sea on a voyage to or from a foreign port for at least 169 days in a tax year on a passenger or cargo ship which is registered in an EU member state's shipping register. The 1998 Finance Act also allowed voyages to offshore servicing installations outside Irish waters to be allowable for the purposes of this seafarers tax allowance. This allowance has now been extended in the 1999 Finance Act to the crews of vessels servicing such rigs within Irish waters.
Certain long-haul seafarers, who do not meet the requirements outlined above, may qualify under the foreign earnings deduction scheme (FED) which applies generally to any persons working abroad for a substantial part of the year. To qualify for this deduction an employee must spend at least 90 qualifying days abroad in a tax year or 12 month period, and each period of absence must be for a minimum of 14 days at a time. A long-haul seafarer can claim either the seafarer allowance or the FED, but not both.
The FED does not apply to the UK. However, I did make an exception last year to cater for the special circumstances faced by seafarers on long-haul voyages who happen to make an incidental stop en route at a UK port. This concession is, therefore, consistent with the overall aim of the deduction as already outlined.
The Irish shipping sector is in a position to avail of an attractive mix of incentives. These incentives cover both employers and employees and include not only the 1998 and 1999 Finance Acts measures outlined above but also the employers' PRSI exemption that currently applies to the Irish maritime transport sector. These provisions are also consistent with the European Commission's guidelines on State aids to the maritime transport sector and I believe that the measures will help improve the competitive position of the Irish shipping sector in the years ahead.
I have no plans to change the income tax reliefs for seafarers which were introduced in 1998 and extended in the 1999 Finance Act.
73 Mr. G. Reynolds asked the Minister for Finance the plans, if any, he has to have the tax free allowance of £6,000 in the farm retirement scheme for unconnected persons to be given to relatives of a person retiring from farming and to give them the same tax free allowance. [15505/99]
Under section 664 of the Taxes Consolidation Act, 1997, there is an exemption from income tax in respect of the first £4,000 of annual leasing income where the leasing is for a period of not less than five years and in respect of £6,000 where the leasing is for a period of not less than seven years. The exemptions are available to lessors of agricultural land aged 55 years or over or to those who are permanently incapacitated by mental or physical infirmity from carrying on farming.
These tax exemptions apply only in respect of leases to qualifying lessees. In this context, "qualifying lessee" specifically excludes from the scope of the relief any leases made between closely connected relatives. A person is connected with an individual if that person is the individual's husband or wife, or is a relative, or the husband or wife of a relative of the individual or of the individual's husband or wife. A relative in this context is defined as meaning brother, sister, ancestor or lineal descendent. The restriction covering leasing to closely connected relatives is a standard anti-avoidance measure without which the relief would be open to manipulation with spurious arrangements being set up, such as the passing back to the lessee of rent on which tax relief had been claimed by both.
I should also point out that there are already very generous stamp duty and capital acquisitions tax reliefs available in the case of permanent transfers of land between family members, such as by gift or sale. For all these reasons, I do not propose to provide an exemption from income tax from a farm land lease entered into between related persons whether for the purposes of the early retirement scheme or generally.
