Labour to demand stud fee tax break facts

MULTI-MILLIONAIRES claiming tax breaks on income from stallion fees should declare their earnings in the last five years, the Labour Party will argue today.

As the Finance Bill reaches Committee stage today, Labour finance spokeswoman Joan Burton will table an amendment requiring anyone claiming tax exemptions on stud fees to make details of their income available for the previous five years.

Last year Finance Minister Charlie McCreevy changed the law for the first time forcing owners to reveal their earnings from stud fees for each year they claim a tax break.

That measure is due to come into effect this year giving the Revenue Commissioners the first indication of just how much is being lost as a result of the tax break.

The huge sums earned by those involved in the stud business were highlighted recently in the row between the Manchester United manager, Alex Ferguson, and the club’s biggest single shareholder John Magnier over ownership of stud rights to the champion miler, Rock of Gibraltar.

Deputy Burton said it was unjust that wealthy people could enjoy exemption from tax, when stable staff working for them could be asked to pay tax at up to 42% on their earnings. “Despite the huge sums being made generally by a small group of exceptionally wealthy individuals there is still no decision that this income should be subject to tax in the same way as other income,” she said.

Ms Burton welcomed the fact that earnings from this year would have to be declared, but asked the Government to extend the measure to include the previous five years.

“This would allow us to see the picture over a numbers of years,” she said. “It would also mean that any attempt to artificially deflate income from stallion breeding for this year would become obvious.”

Deputy Burton will also today table an amendment aimed at establishing a commission on taxation to inquire into the fairness of the tax system and the impact of provisions for exemption from tax and residency rules.

A spokeswoman for the Department of Finance said there were no plans to alter the arrangements for tax exemptions in the equine industry.