Richard Bruton (Dublin North Central, Fine Gael)
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Question 96: To ask the Minister for Finance if retired civil servants who are living in the UK can be paid without deduction of Irish taxes or alternatively if arrangements can be made not to deduct health levy which is not covered by double tax agreement rules and confers no entitlement on those residing abroad. [15761/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that the pension payable to a former officer of the Civil Service is chargeable to tax in the State irrespective of where he or she resides, unless such pension is relieved from the charge to Irish tax under the terms of a double taxation agreement between the State and another country.

Article 18(2) of the convention for the avoidance of double taxation between the State and the United Kingdom provides that any pension paid by, or out of funds created by, a contracting state in respect of services rendered to that State shall be taxable only in that State except where the individual is a resident of, and a national of, the other contracting state.

Consequently, individuals living in the United Kingdom in receipt of a Civil Service pension from the State are taxable in Ireland on that pension unless they are nationals of the United Kingdom, in which case, they will pay tax there on that pension. The reason that double taxation agreements make no mention of health contributions, also known as the health levy, is that such contributions are not tax.

The legal basis for the health contributions levy is contained in the Health Contributions Act 1979, as amended, and associated regulations. While the legislation is a matter for the Tánaiste and Minister for Health and Children in the first instance, generally speaking income which is subject to an income tax charge is also subject to the health contributions levy. This is subject to the following main exceptions which are set out in terms of categories of exempt persons. These include persons whose gross income does not exceed €440 per week; persons who are fully eligible for health services under section 45 Health Act 1970, such as holders of an medical card; persons in receipt of a widow or widower's contributory or non-contributory pension or occupational injuries pension payable under the Social Welfare Acts or a corresponding EU pension; persons in receipt of a deserted wife's benefit or allowance payable under the Social Welfare Acts; persons in receipt of a lone parents allowance payable under the Social Welfare Acts. There are no plans to alter the applicability of the health contributions levy.

Paul Kehoe (Wexford, Fine Gael)
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Question 97: To ask the Minister for Finance the position with regard to farmers who were in the early retirement scheme and have completed their term of ten years with regard to capital gains retirement relief; if a farmer who has finished in the farm retirement scheme should make a disposal of less than €500,000 if they still qualify for the retirement relief applicable with regard to the disposal of part of their farm where the consideration is less than €500,000, bearing in mind that when they were in the farm retirement they could qualify for this relief and as a result of being in the farm retirement scheme they can never farm again; and if he will make a statement on the matter. [15894/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that land leased in compliance with the terms of the schemes of early retirement from farming is a qualifying asset for capital gains tax retirement relief purposes provided it was owned and used for farming purposes by the individual claiming relief throughout the period of ten years immediately prior to it being first leased. Effectively the period of ownership and usage tests on land leased under these schemes are applied when the land is leased rather than when it is disposed. Where the farmer disposes of some or all of such land after he or she has finished in the scheme full relief from capital gains tax will apply where the individual is 55 years or more at the time of disposal and the consideration, inclusive of any earlier disposals of qualifying assets, does not exceed €500,000. Otherwise marginal relief may apply. Where the disposal is to a child or favoured nephew or niece of the individual the €500,000 threshold does not apply and full relief from capital gains tax is given.