Joe McHugh (Donegal North East, Fine Gael)
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Question 276: To ask the Minister for Finance the reason the salmon hardship fund payments are subject to taxation as in the case of a person (details supplied); and if he will make a statement on the matter. [33477/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The position is that payments from the hardship fund have two identifiable component parts. One component part is taxable; the other is not. The part of the payment which relates to the 2006 licence fee is not liable to tax. I understand that when making payments Bord Iascaigh Mhara identified the amount of the payment relating to the 2006 licence fee so that this could be excluded from income tax returns.

The taxable component is that part of the payment related to catch. This part of the payment is based on the verifiable catch for each licence holder and the average net income per salmon for the 5 years 2001 to 2005 i.e. €23 per salmon. This element is an income replacement figure and is taxable on recipients as income of the year of receipt.

I am also advised that to facilitate recipients who wished to spread the taxable amount over three tax years, eligible applicants could opt under the scheme to receive their payment in one sum or alternatively to have it paid in equal amounts over a three- year period (2007 to 2009).