As 400 farmers this week receive demands for income tax payment in relation to their purchase of shares through Kerry Co-op’s patronage scheme in 2011, the Irish Farmers Journal has uncovered that the €65 share valuation is based on only five trades.

The shares, which have a face value of €1.25, can only be traded on the grey market. It’s likely that farmers will challenge Revenue’s stance on the grounds that five share trades among 13,000 shareholders does not constitute a real market or price on which to base share valuation. Now that demands have been received, a challenge must be mounted within 30 days.

The Irish Farmers Journal’s extensive investigation of Revenue’s files, conducted through a Freedom of Information request, has also confirmed that Revenue intends to extend the tax net to all 3,500 Kerry suppliers who purchased patronage shares in 2012 and 2013.

ICMSA president John Comer said that it was difficult to overstate the importance of the issue that lay at the heart of the Kerry/Revenue dispute.

“We do not accept that retrospective reclassifications for tax purposes are either fair or workable,” he said.

“These shares are a capital asset – they are not income. The present system where CGT is paid when the share value is realised is much fairer and gives the degree of certainty that people want to see in a tax system.”

Stay tuned to www.farmersjournal.ie at 10pm for more on our exclusive investigation into the Kerry Co-op shares project

Read more

Revenue running Kerry patronage shares project with dedicated staff