Andrew Doyle (Wicklow, Fine Gael)
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Question 154: To ask the Tánaiste and Minister for Finance if the farm rental income tax exemption scheme applies to a father-son arrangement even when this lease is stamped and approved of by the Revenue Commissioners; the tax considerations of establishing share farm arrangements where the landowner is the non-active participant; and if the unearned income tax relief applies in this case. [9492/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Section 664 of the Taxes Consolidation Act 1997, provides for a scheme of relief for certain income from leasing of farmland. Broadly speaking, if a farmer who is aged 40 years or more or who is permanently incapacitated, leases out farm land for a period of at least 5 years, some or all of the rent received from that land will be exempt from income tax. The amount of exemption varies depending on the length of the lease. The scheme operates by exempting the lower of the rental income received or a specified amount which varies depending on the length of the lease. Currently the specified amounts are €12,000 in the case of a lease for a term of at least 5 years, €15,000 where the lease is for a term of 7 years or more and €20,000 where the lease is for a term of at least 10 years. The scheme applies where there is a lease in writing made on an arm's length basis between unconnected individuals for a definite term of 5 years or more. Thus, a lease of land between a father and son would not be a qualifying lease for the purposes of the scheme.

It is not clear what "share farm arrangements" the Deputy is referring to in the second part of the question. I am also not clear what unearned income tax relief the Deputy has in mind. However, if the Deputy wishes to supply me with further details I will be happy to deal with the matter.

Jack Wall (Kildare South, Labour)
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Question 155: To ask the Tánaiste and Minister for Finance if a person (details supplied) in County Kildare has received their full tax credits for 2008; if arrears of tax credits are due for the years 2006 and 2007; and if he will make a statement on the matter. [9494/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have been advised by the Revenue Commissioners that a certificate of tax credits and standard rate cut-off point issued to the taxpayer on 21 February 2008. This included all credits claimed by the taxpayer. PAYE balancing statements for the years 2006 and 2007 were sent to the taxpayer on 8 October 2007 and 20 February 2008 respectively. All credits claimed by the taxpayer for these years were included in the statements and refunds made accordingly.

Joan Burton (Dublin West, Labour)
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Question 156: To ask the Tánaiste and Minister for Finance the position where parents or others assist a first time buyer to acquire a house; if this can have implications for first-time buyer's relief; if so, under what conditions; and the checks the Revenue Commissioners carry out to check that FTB rules are adhered to. [9544/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have been informed by the Revenue Commissioners that the following tax implications arise where a parent or others assist a first time buyer to buy a house.

Stamp Duty

A child is not precluded from claiming first time buyer relief where a parent acts as co-mortgagor in relation to the purchase by the child of a house. The parent is treated as effectively acting in the role of guarantor for the loan where the following conditions are satisfied:

the transfer of the house is taken in the name of the child,

it is the intention of both the child and the parent that the parent is not to take a beneficial interest in the house,

the parent has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase,

it is not intended that the parent will be contributing to the repayment of the mortgage.

A similar treatment applies where the co-mortgagor is not a parent of the first time buyer.

Any first time buyer, who receives an unconditional gift of monies which is used to fund the purchase of a house, is not precluded from claiming first time buyer relief on the basis that the donor does not take a beneficial interest in the house.

Provisions have been included in the Finance Bill 2008 which further clarify the position in relation to first time buyer relief including the definition of a purchaser for the purposes of claiming first time buyer relief.

A Purchaser is required to confirm whether he or she is a first time buyer and this is done by inserting a mandatory certificate to that effect in the purchase deed to be submitted for stamping to the relevant Revenue Stamping District.

Revenue uses its risk evaluation procedures to check for potential abuse of first time buyer relief. Revenue databases are interrogated as part of this risk evaluation process including the Tax Relief at Source database (to ascertain whether Mortgage Interest Relief has previously been claimed). In addition, the databases of the Private Residential Tenancies Board and the Property Registration Authority can be accessed on a case by case basis should the need arise. Cases may be referred to Revenue auditors for additional examination and Revenue audit, where appropriate.

Gift Tax

A liability to gift tax for a first time buyer may arise depending on the amount of the gift and the relationship between the donor and the donee involved.

Tax Relief at Source

Tax Relief at Source for home mortgage interest (known as TRS) is available on loans for Principal Private Residences. The relief element on the mortgage interest is given, by the lender, either in the form of a reduced mortgage payment or a credit to the borrowers funding account.

A qualifying loan for the purpose of mortgage TRS is a secured loan, used to purchase, repair, develop or improve a sole or main residence, situated in the State. Therefore, if a person not resident in the property borrows to assist in its purchase these borrowings are not eligible for the relief.

However, mortgage interest paid in respect of a mortgage for a dependent relative (including an incapacitated son or daughter) for whom a dependent relative tax credit is claimed is eligible for TRS.

Michael Ring (Mayo, Fine Gael)
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Question 157: To ask the Tánaiste and Minister for Finance if he will extend the same tax concessions to a sector (details supplied) as those granted to the white fish fleet in Budget 2008; and if he will make a statement on the matter. [9567/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position with regard to the taxation of the Salmon Hardship Fund is that individual payments under the scheme have two identifiable component parts and that one part is taxable while the other is not. The taxable component is that part of the payment which is based on a fisherman's catch and is 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 is not liable to tax. I understand that when making payments, Bord Iascaigh Mhara identify the amount of the payment relating to the 2006 licence fee so that this may be excluded from income tax returns.

In addition, in order to facilitate recipients wishing to spread the tax liability on the payments over three years, eligible applicants may opt to receive their payment in one sum or alternatively to have it paid in three equal amounts over a three-year period.

In Finance Bill 2008 I introduced provisions to amend the income and capital gains tax codes to assist the take-up of the decommissioning scheme to support the restructuring of Ireland's fishing fleet in line with the European Communities initiative concerning compensation for decommissioning of fishing vessels.

There is no scope for the extension of these Finance Bill measures to payments made under the Salmon Hardship Fund. Firstly, there is no requirement under the Salmon Hardship Scheme for the permanent withdrawal of fishing vessels from the fishing fleet in order for applicants to qualify for payments under the scheme. Secondly, in the case of the amendment to the capital gains tax code, the part of the Salmon Hardship Fund that is liable for taxation is liable for taxation under the income tax code. As this particular payment is based on the average verifiable catch for each licence holder for the 5 years (2001-2005) it is an income replacement payment and under long-standing principles of taxation such payments are taxable as income. The question, therefore of extending the application of this amendment to the Salmon Hardship Fund cannot arise.