This is another relieving section for the farming community in order to allow that under the early retirement scheme, the transfer of stock in the accounts from the father to the son will be at the book value. This is good; otherwise the market value would be declared and there would be a once off tax liability which would make the transfer impossible. It has been brought to my attention and, I am certain, to the attention of the Department of Finance that the way the section is drafted at present might make the current situation with respect to the taxes apply to other situations and might make it necessary for the Revenue Commissioners to revise their interpretation of the practice up to now. Perhaps the Minister could consult with his officials and some of the farming community and have it considered again on Report Stage. My understanding is that the effect of this section might be to change the practice which has existed up to now regarding stock valuations. Perhaps that point could be considered between now and Report Stage.
SECTION 11.
The reason we introduced this, I am informed, was to facilitate a better take up of the EU early retirement system. If, however, your information is that it may open up the possibility of an unintended door — I respect your sources of information — we will look at that.
This is one of the drawbacks to the farm retirement scheme. In discussions between the farming bodies and the Revenue Commissioners the Department of Finance put forward this welcome proposal. It is a good idea. I now understand that this proposal might open up something which it was not intended to do at all. Some people are worried about that. It could mean that the Revenue Commissioners would have to change the legal interpretation in other situations to do with farm stocks; this was not the intention of the section. The section as it stands is all right, but perhaps the Minister and his advisers could look at it.
We will take a note of that and come back to you with a report on it.
The farm retirement provisions are welcomed by young farmers. In fairness to the Minister, he has an understanding of farming, from what I have seen in the Finance Acts, and it is very important that young farmers get all the encouragement they need. It is vital that those who are going out of the system must be encouraged to transfer their farms. The age profile of our farmers is still too high and many of our well qualified young farmers are heavily committed to rural development. It is vital that provisions such as these are made by the Legislature to ensure that farming is sustained. I welcome this provision.