Thomas P. Broughan
Question:150. Deputy Thomas P. Broughan asked the Minister for Finance when section 28 of the Finance Act 2016 will come into effect; and if he will make a statement on the matter. [36423/18]
View answerFriday, 7 September 2018
Questions (150)
Written answers
Section 28, Finance Act, 2016 amended section 598(3A) of the Taxes Consolidation Act 1997 which grants relief from capital gains tax in respect of compensation which has been received by a person under the scheme of compensation in respect of the decommissioning of fishing vessels implemented by the Minister for Agriculture, Food and the Marine. As part of the policy to encourage decommissioning of such vessels, this extended the terms of CGT retirement relief for those receiving such compensation under the scheme and lengthened the time over which recipients of such relief could pay balancing charges for capital allowances on vessels. At the time of the passing of the Act, the introduction of the relief was subject to a commencement order to be signed by the Minister for Finance with the consent of the Minister for Agriculture, Food and the Marine.
I understand that Ireland’s European Maritime and Fisheries Fund Operational Programme 2014-20 provided for the implementation of a scheme to incentivise the permanent decommissioning of fishing vessels in certain imbalanced fleet segments. An Bord Iascaigh Mhara commissioned consultants to carry out a cost benefit analysis study of the proposed scheme. The consultants concluded that while the proposal could have a positive return, they recommended against a decommissioning scheme proceeding, as they considered that there was a significant risk that the benefits of the scheme would be eroded by use of the decommissioning premiums to fund re-entry to the fleet using off-register fleet capacity. The Department of Agriculture, Food and the Marine sought solutions to this issue with representatives of the fishing industry, but no legally robust solutions were identified. I understand that there was also a number of legal and State Aid obstacles to resolving the off-register obstacle.
As a result I believe that the Minister for Agriculture, Food and the Marine concluded that a decommissioning scheme could not proceed. Under the EMFF Regulation, Permanent Cessation schemes were no longer permitted after 31 December, 2017. On that basis, and as no scheme will now be introduced, it is not intended that section 28 Finance Act, 2016 will now be commenced.
Questions Nos. 151 and 152 answered with Question No. 92.