Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I know the Deputy's question relates to farmers or foresters who sell their trees for profit and whose trees have become damaged or diseased. As he said, there is a particular issue with ash dieback disease, sometimes referred to as chalara, which is of particular relevance to his question. Profits or gains from the occupation of woodland in the State, which is managed on a commercial basis and with a view to realising a profit, are exempt from income tax and corporation tax under section 232 of the Taxes Consolidation Act 1997.  It follows that the issue of a tax deduction is not relevant in such circumstances because the income is already exempt from income and corporation tax. With regard to section 232, forestry plays a key role as a carbon sink, helping to mitigate the increase in greenhouse gas emissions from other sectors of the economy. It is capital-intensive investment with costs front loaded. Compared with other industrial sectors, it has a relatively long period before returns are realised.

The Department of Finance reviewed all of these schemes in 2006 and these issues were again looked at in 2014. An exemption from capital gains tax, under section 564 of the Taxes Consolidation Act 1997, is also available to an individual in respect of gains realised on the disposal of woodlands, to the extent those gains relate to standing timber.  Any gain attributable to the underlying land is subject to capital gains tax. In certain cases of tree farming, which do not amount to occupation of woodlands, the exemption in section 232 does not apply. In these cases, a tax deduction may apply where immediate solution costs are incurred wholly and exclusively in respect of the trade.

Non-tax measures on forestry generally and ash dieback disease are, of course, matters for the Minister for Agriculture, Food and the Marine and I understand he has put in place a support scheme for plantations affected by ash dieback, known as the reconstitution and underplanting scheme, to assist farmers and foresters with site clearance and replacement of affected crops.

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