Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I move amendment No. 17:

In page 20, after line 38, to insert the following:"Amendment of section 664 of Principal Act (relief for certain income from leasing of farm land)

14. (1) Section 664 of the Principal Act is amended—

(a) in subsections (1) and (7), by substituting "EU Basic Payment Scheme" for "EU Single Payment Scheme", and

(b) in subsection (8), by substituting the following for paragraphs (a) and (b):

"(a) a qualifying lessee of the lease (in this paragraph referred to as the ‘first mentioned lease’), or a person connected with that qualifying lessee of the first mentioned lease, is a qualifying lessor of another qualifying lease (in this paragraph referred to as the ‘second mentioned lease’) where the qualifying lessor of the first mentioned lease is a qualifying lessee of the second mentioned lease,

(b) a qualifying lessee of the lease (in this paragraph referred to as the ‘first mentioned lease’) is a qualifying lessor of another qualifying lease (in this paragraph referred to as the ‘second mentioned lease’) where that qualifying lessor of the first mentioned lease, or a person connected with that qualifying lessor, is a qualifying lessee of the second mentioned lease, or".

(2) Subsection (1)(b) shall come into operation on 2 November 2017.".

This amendment deals with a drafting error in relation to anti-avoidance provisions which were inserted into section 664 of the Finance Act 2015. Section 664 provides for the tax free receipt of rental income from certain long-term qualifying leases of farm land. The previous anti-avoidance provisions were inserted to prevent the exploitation of the provision by persons entering into cross leases of land in order to both generate tax free income and an allowable deduction. It has come to my attention that a drafting error was included in the Finance Act 2015, a measure which may render the anti-avoidance provision inoperable. The purpose of this amendment is therefore to rectify this error. The words "lessor" and "Lessee" in section 664(8)(a) and (b) were transposed. This amendment swaps them back to where they should be.

An additional technical amendment is also included to update terminology used in section 664 to reflect the EU basic payment scheme, which has replaced the EU single payment scheme since the start of 2015.