Section 657B [Restructuring and diversification aid for sugar beet growers]

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Amendments

Section 657B and heading substituted by Finance Act 2008 section 20 for 2008 and later tax years (inserted by Finance Act 2007 section 23).

(1) In this section―

"specified individual" means an individual who carries on in the year of assessment 2007 or in any subsequent year of assessment the trade of farming in respect of which the individual is within the charge to tax under Case I of Schedule D;

"specified payment" means a payment to a specified individual under the EU temporary scheme for the restructuring of the sugar industry in the Community, operated by the Department of Agriculture, Fisheries and Food under any of Articles 3(6) first indent, 6 and 7 of Council Regulation (EC) No. 320/2006 of 20 February 2006 (OJ No. L58, 28 February 2006, p. 42) (as amended by Council Regulation (EC) 45 No. 1261/2007 of 9 October 2007 (OJ No. L283, 27 October 2007, p. 8)) in respect of which the specified individual would, apart from this section, be chargeable to income tax on the profits or gains from farming for the year of assessment 2007 or for any subsequent year of assessment.

Who does this relief apply to?

(1) This section applies to a specified individual, i.e., who is carrying on a farming trade, and who receives a payment under the EU temporary scheme for the restructuring of the sugar industry (a specified payment).

(2) A specified individual may elect to have the aggregate of all specified payments made to the individual which would, apart from this section, be chargeable to income tax for a year of assessment treated in accordance with subsections (3) to (6), and each such election shall be made in such form and contain such information as the Revenue Commissioners may require.

Can I elect to treat EU payments for sugar beet as received over several tax years?

(2) As a farmer (a specified individual), you may elect to treat diversification and payments (specified payments) as received over several tax years.

(3) Notwithstanding any other provision of the Income Tax Acts apart from subsection (4), where a specified individual elects in accordance with subsection (2), the specified payment or specified payments shall be disregarded as respects the year of assessment referred to in subsection (2) and shall instead be treated for the purposes of the Income Tax Acts as chargeable in equal instalments for the year of assessment so referred to in subsection (2) and for the 5 succeeding years of assessment.

How does the election operate?

(3) If you make the election in (2), the specified payments are disregarded in the tax year you receive them. Instead, the payment is taxed in five equal instalments over the following five tax years.

(4) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the year of assessment in which such discontinuation takes place in respect of the amount of any specified payment which would, but for such discontinuance, be treated by virtue of subsection (3) as chargeable for a year of assessment or years of assessment ending after such discontinuance.

How are "post-cessation" instalments taxed if my farming trade ceases?

(4) If your farmimg trade closes, tax on any "post-cessation" instalments is charged under Schedule D Case IV in the year of cessation.

(5) An election under subsection (2) by an individual to whom this section applies, shall be made by notice in writing on or before 31 October in the year of assessment following the year of assessment referred to in subsection (2).

What is the time limit for making my election for averaging?

(5) You must make your election for averaging in writing on or before the self-assessment return filing date.

(6) Subject to subsection (4), an election made under subsection (2) shall not be altered or varied during the period to which it relates.

Can I change my election for averaging?

(6) Unless your trade ceases, an election for averaging, once made, may not be changed.