Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 126: To ask the Minister for Finance the reason a person (details supplied) in County Kilkenny was not allowed a tax refund under section 381 of the consolidation Act 2007 in view of the fact that the person operates a business and should be treated as such; and if he will make a statement on the matter. [42470/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have been informed by the Revenue Commissioners that loss relief was refused in this case under Section 662 (2)(b) of the Taxes Consolidation Act 1997 --- " any loss---incurred in any year of assessment in a trade of farming or market gardening shall not be available for relief under section 381 if in each of the prior 3 years a loss was incurred in carrying on that trade."

For the years 2006, 2007 & 2008, the individual in question incurred substantial losses and tax was refunded accordingly. For 2009, a further more substantial loss was incurred. The individual was visited and the business examined in detail. Following this relief was refused. The individual in question failed to satisfy the Inspector concerned that Section 662(2)(d) should apply i.e.

(i) "that the whole of the--- farming activities in the year following the prior 3 years are of such a nature, and carried on in such a way, as would have justified a reasonable expectation of the realisation of profits in the future if those activities had been undertaken by a competent farmer or market gardener, and

(ii) that if such a farmer or market gardener had undertaken those activities at the beginning of the prior period of loss, such farmer or market gardener could not reasonably be expected those activities to become profitable until after the end of the year following the prior period of loss."

The loss incurred may be carried forward under Section 382 of the Taxes Consolidation Act 1997 for set off against profits incurred in the same trade in future years.

If the taxpayer is dissatisfied with this determination, the assessment issued may be appealed under Section 933 of the Taxes Consolidation Act 1997. The taxpayer and her agent have already been advised verbally that the assessment could be appealed to the Appeal Commissioners.