Richard Bruton (Dublin North Central, Fine Gael)
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Question 534: To ask the Minister for Finance if his attention has been drawn to a new Revenue practice, which proposes to exclude single farm payments from the scope of tax exemptions available on certain leases of farmland; and if he will review this position which is contrary to the understanding of farm organisations as to the way in which this relief would operate. [1603/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Section 664 of the Taxes Consolidation Act 1997 exempts from income tax certain income from the leasing of farmland. Broadly speaking, if a farmer aged 40 years or over leases out farm land for a period of at least five years, some or all of the rent received for that land will be exempt from tax.

From its inception in 1985, this legislation contained a provision — subsection (4) — that, where a lease relates to both farm land and other property, goods or services, only the income from the lease of the farmland qualifies for the tax relief. The exclusion of the single farm payment from the scope of the relief is not, therefore, a "new Revenue practice". It is provided for in the law as it stands. In Taxbriefing issue 61 of November 2005, Revenue set out accordingly the taxation implications of the single farm payment scheme. A link to the full text of the Taxbriefing article is at http://www.revenue.ie/publications/ txbrefng/tb61/frameset.htm. However, as I announced in the budget, certain matters relating to the EU single farm payment entitlement will be contained in the Finance Bill 2006, which will be published shortly.