Robert Dowds (Dublin Mid West, Labour)
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To ask the Minister for Finance if he will outline the arguments for and against a tax on stud farms; and if he will provide an estimate of the amount that may realistically be raised by such a tax. [58034/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that the profits and gains arising from stud farms including, for example from the sale of horses and stallion services, are fully chargeable to income tax and corporation tax. I am also advised that profits or gains from the sale of certain stallion services which arose prior to 1 August 2008 were exempt from income tax and corporation tax. However, this exemption, which did not apply to any other profits arising from stud farms, was discontinued for such profits arising on or after 1 August 2008.

Since that date, stallions are treated as stock in trade and, where the stallion owner carries on a farming trade in the State, the purchase cost of a stallion may be written-off against the profits of that trade over a 4-year period at 25 per cent per annum.

As regards the tax yield from stud farm profits, I am advised by the Commissioners that, as income tax is assessed on the combined income of taxpayers after allowing appropriate deductions and reliefs, it is not possible to separately distinguish the tax arising on stud farm profits from the tax on other sources of income.