Mr. Paul Walsh:

On Deputy Brassil's point, where he stated the shares were issued in 2011 but actually it relates to the 2010 milk supply and then it is proper to go back to 2010 and assess it in 2010, under the tax rules and principles, one is taxed when one receives the value.

Even though a person may have supplied the milk in 2010, he or she only got the value for that in 2011. In the same way, if a person only got the value in 2012 or 2013, we could not go back and say the person should have paid tax in 2010 and look for the tax on the due date in 2010 and interest from 2010. It is when a person received the value that he or she is assessed on the tax. Even though it relates to the supply of milk in 2010, one got the value for that when the shares issued.

Deputy Michael Healy-Rae made the point about the valuations fluctuating. They did fluctuate over the years in question. In our letter to farmers we said these were the average values over the years in question. They far exceeded the nominal value of €1.27 that was paid for the share, and those were the values that were put into the letter. The point has come up a few times that it was just paper that the farmers received and they had no value. They clearly had a value. We established that in recent years. The shares were traded far and above their issue price. One can debate what precise valuation will apply to each particular farmer.

That goes back then to the issue of a test case, which Revenue is quite willing to facilitate, but again that is a matter for the Tax Appeals Commission. There are two issues for the commission. One is the principle of whether there is an income tax liability having regard to the value of the shares when they were issued and the next part is what is the valuation. While we may have a test case and we will be able to establish the principle in the test case, the valuation will depend on each farmer and the particular date when their shares were issued, so we might not have a resolution from a test case because there is the second element of the valuation to be determined as well.

A point has also been addressed on the penalties. I accept Deputy Healy-Rae’s point that the farmers have done no wrong. Where the farmer has acted on professional advice and the professional advice was not to include the market price, then it would be very difficult for Revenue to establish fraud and neglect on behalf of a farmer.