There are 3 elements to the overall sugar beet compensation package: Compensation to growers, Restructuring Aid, and Diversification Aid. The tax treatment of sugar beet compensation payments to former sugar beet growers is a matter for the Revenue Commissioners. I am informed by the Commissioners that, based on the information available to them on the current proposals for the payment of such aid, the payments are regarded as income and will be subject to income tax. The payments are not, therefore, regarded as a capital receipt and the issue of whether an asset disposal takes place does not affect their tax treatment.
In Budget 2008 I announced that the income from diversification aid payments would be spread over 6 years for the purpose of calculating income tax liability. This follows a similar provision in Finance Act 2007 for the restructuring aid element of the compensation package.