Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 54: To ask the Tánaiste and Minister for Finance his views on where an individual exceeds the threshold mainly because of income from harvesting of forestry, and only on very infrequent years, they could be exempt from the scheme totally, or alternatively an averaging of income to be allowed; and if he will make a statement on the matter. [27875/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The restrictions on the use of tax reliefs announced in Budget 2006 and provided for in Section 17 of Finance Act 2006, which took effect from 1 January 2007, were introduced to ensure equity in the tax system. Income from the harvesting of forestry was listed as one of the specified reliefs that would be affected by the measures. Relief not used in one tax year can be carried over to subsequent tax years to be offset against future income.

This restriction on the use of tax reliefs only applies in full to high income taxpayers earning over half a million Euro in a single tax year and on a sliding scale to those high income taxpayers earning between a quarter and half a million Euro a year. While it is accepted that forestry investment is a long term investment, this measure was introduced to counteract the situation whereby some high income individuals were able reduce their taxable income to nil or close to nil through the use of tax reliefs. The restriction will help, in the interests of equity, to increase the effective rate of tax paid by high income individuals towards a minimum 20%.

Michael Lowry (Tipperary North, Independent)
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Question 55: To ask the Tánaiste and Minister for Finance if he will confirm what a letter of consistency comprises of in relation to Section 23 Relief that is, the way this letter should be worded by the council in question; and the rules or guidelines the applicant would have to adhere to for both town and rural renewal schemes. [27849/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I take it the Deputy is referring to projects undertaken under the Town Renewal Scheme. Developers of projects wishing to avail of the tax reliefs provided for under the Town Renewal Scheme must obtain a letter of certification from the relevant local authority stating that the development is consistent with the objectives of the Town Renewal Plan. This requirement is provided for in section 7 of the Town Renewal Act 2000 and the guidelines issued under the Act by the Department of the Environment, Heritage and Local Government. These guidelines provide that local authorities in considering whether to issue such a letter of certification should apply the following criteria in respect of developments for which tax relief is being claimed:

(i)the development has been completed,

(ii)the development has been carried out in support of the objectives of the town renewal plan,

(iii)the development complies with any specific conditions set out in the town renewal plan in relation to development in the area to which the plan relates or in relation to development in any part or parts of that area,

(iv)the use or uses proposed for the building, structure or house are consistent with the uses for which the area in which the building, structure or house is located, has been declared to be a qualifying area for the purposes of one or more sections of Chapter 10 or Chapter 11 of Part 10 of the Taxes Consolidation Act, 1997, and

(v)the design of the building or structure takes account of the nature and character of the area in which it is located and complies with any other design standards set out in the town renewal plan,

Also all appropriate information as set out in the guidelines must be provided and the veracity of such information should be verified. The certification guidelines are set out in the Department of the Environment, Heritage and Local Government's website and can be accessed at http://www.environ.ie/en/DevelopmentandHousing/ PlanningDevelopment/UrbanandVillageRenewal/ TownRenewalScheme/. There is no such certification requirements under the Rural Renewal Scheme.