Section 10 deals with the income derived from certain leases of farmland. If a person agrees a lease for a five to six year term, the exemption limit will rise to £4,000. If the term of the lease is six to seven years, the limit will be £6,000. Why not charge a fixed rate for all leases?
SECTION 10.
Question proposed: "That section 10 stand part of the Bill".
The section provides an incentive to people entering into longer leases to make improvements to their farms or to make capital investments. This is to make a longer lease more worthwhile.
I accept the principle behind the section——
Given the logic with which the farming community operates, they would demand an extra allowance for a longer lease in addition to the rationalisation we have supplied. I am surprised that Deputy McCreevy, who lives in County Kildare, would not have seen that. I live in the urban jungle of Dublin South East——
I do see it, Minister. The exemption well be £4,000 for a lease of five to six years and £6, 000 for seven or more years. It strikes me as common sense to make the term seven years and institute a flat exemption of £6,000.
We will see what the take up is. We do not want to give them more money than they need; perish the thought.
I am just making the point that it looks to me to be common sense. You are only talking about one year. Why not introduce the same exemption limit for the whole lot rather than having this complication in the system? We are talking about simplifying the taxation code. Someone must think there is some good reason for having this differential, but I cannot see it.
It came from our discussions and pre-budget submissions with the farming community. The intention was to send a signal that longer leases would attract a higher tax benefit. That is the thinking behind it.
Question put and agreed to.