Michael Lowry (Tipperary North, Independent)
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Question 193: To ask the Minister for Finance if he will introduce additional incentives for farmers or foresters growing native ash trees, in view of the number of thefts of ash trees and the ever increasing demand for the timber for hurley making; and if he will make a statement on the matter. [6860/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The payments of grants or premia for growing native ash trees is a matter for the Minister for Agriculture and Food in the first instance. I have been informed by that Minister that grant payments of €4951.98 per hectare are available in respect of non-oak or non-beech broadleafs. In addition, farmers can qualify for annual premia for 20 years of €441.87 per hectare for plantations of less than six hectares, €454.57 per hectare for plantations of between six hectares and 12 hectares and €467.26 per hectare for plantations of 12 hectares or more.

From a tax perspective, while there are no tax incentives directed specifically towards "farmers or foresters growing native ash trees" there are income tax and capital gains tax incentives which can apply in these situations.

Section 232 of the Taxes Consolidation Act 1997 provides that the profits or gains arising from the occupation of woodlands managed on a commercial basis and with a view to the realisation of profits shall be exempt for income tax and corporation tax.

The exemption applies where the profits from the sale of the trees, whether as standing timber or as felled and cut up, are made by a landowner who has planted the trees and managed the woodlands estate. It applies also where the sales are made by a landowner who has acquired by purchase, inheritance or otherwise woodlands previously planted, assuming he continues to occupy and manage them on a commercial basis.

For capital gains tax purposes, where an individual makes a disposal of woodland, the consideration for the disposal of the trees growing on the land and saleable underwood are not taken into account for capital gains tax purposes. Thus, where land held by an individual is sold with standing timber on it, the consideration for the disposal is to be apportioned and the part of the consideration attributable to the trees or saleable underwood excluded. Insurance proceeds received by an individual in respect of the destruction of or damage to standing timber or saleable underwood are also excluded for capital gains tax purposes.

As the consideration for standing timber and saleable underwood are excluded from the sales proceeds of woodland, in computing any gain or loss on the disposal of the woodland that part of the cost of the woodland attributable to standing timber and saleable underwood is also to be excluded.

I have no plans at present to widen the scope of the current tax treatment of income and capital gains from woodlands. However, this tax exemption is one of the tax exemptions being reviewed this year, as announced in the 2005 budget.