Ned O'Keeffe (Cork East, Fianna Fail)
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Question 131: To ask the Minister for Finance if payments made to fishermen under the hardship scheme buy-out are taxable. [11015/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that individual payments from the scheme in question will have two identifiable component parts and that one part will be taxable while the other will not. The taxable component will be that part of the payment which is based on a fisherman's catch and this will be taxable on recipients in the year of receipt. Accordingly, commercial fishermen should include this part of any payment as a receipt in their accounts. The part of the payment which is based on the 2006 licence fee will not be liable to tax. Before making payments it is expected that BIM will identify the amount of the payment relating to the 2006 licence fee so that this may be excluded from income tax returns.

I am also informed that to facilitate recipients wishing to spread the taxable amount over three years, eligible applicants may opt under the scheme to receive their payment in one sum or alternatively to have it paid in three equal amounts over a three-year period.