Dáil Éireann díospóireacht -
Tuesday, 10 Dec 1996

Vol. 472 No. 6

Written Answers. - Income Subsidies.

Tony Gregory

Ceist:

39 Mr. Gregory asked the Minister for Finance if he will list all subsidies which are received by farmers as income subsidies and which are so regarded for tax purposes; if he will list the subsidies not considered as income; and the estimated amount of each of the listed subsidies in each of the years 1994 and 1995. [23678/96]

Minister for Finance (Mr. Quinn)

I am informed by the Revenue Commissioners that, based on figures published by the Department of Agriculture, Food and Forestry, subsidies received by farmers as income subsidies in the years 1994 and 1995 were as per the following schedule.

Income tax statistics do not distinguish between the amounts of tax that arise from farm subsidies and from other sources. I am informed by the Revenue Commissioners that to provide the breakdown required would necessitate a detailed examination of all the returns received from farmers. Such an examination could only be carried out at a disproportionate cost.

The general position is as follows. First, where a payment is made to a farmer in circumstances where it is intended to be a subsidy towards income, it will generally be taxible as income. Second, where the payment made is intended to be an amount to aid the purchase of a capital item, it will generally reduce the cost of the item for capital gains tax purposes and for capital allowances purposes, if appropriate. Third, payments made for the forfeiture or surrender of rights will generally be liable to capital gains tax. Fourth, certain payments made may be income payments but are exempted by virtue of certain provisions in the Income Tax Acts, e.g. forestry premia may be exempted under section 18 of the Finance Act, 1969.

Fifth, in rare instances payments under a scheme may be both income and capital in nature, e.g. a small part of payments made under the rural environmental protection scheme, REPS, may be capital. Sixth, some of the payments listed on the following schedule under the heading other milk payments are categorised for tax purposes as capital receipts. Installation aid for young farmers is also categorised as capital for tax purposes. Otherwise, all of the payments listed in the schedule are regarded as income for tax purposes. Seventh, it has not been possible, in the time available, to extract a list of subsidies not considered as income subsidies. This list will be compiled in the near future and a copy will be sent to the Deputy.

Direct Income Payments — 1994 and 1995

	1994	1995+
	(£m)	(£m)
Headage	529.4	582.84
of which
Cattle Headage	93.8	80.21
Beef Cow	19.0	17.03
Suckler Cow	89.9	106.12
Special Beef Premium	122.5	169.82
Deseasonalisation Premium	15.6	15.02
Sheep Headage	20.8	20.35
Ewe Premium	117.3	107.97
Extensification Premium	47.5	59.78
Others	3.0	6.54
Arable Aid	66.0	82.40
Disease Eradication Schemes	17.2	20.94
Other Milk Payments	36.6	13.36
Forestry Premium Scheme	1.0	3.50
(Accompanying Measures)
Installation Aid for Young Farmers	2.3	4.18
REPS	1.2	30.85
Others	15.8	9.14
Total Payments	15.8	747.21

† Estimated.