Billy Timmins
Question:27 Mr. Timmins asked the Minister for Finance if roll over relief will be reintroduced for the agricultural industry; and if he will make a statement on the matter. [29225/03]
Written Answers. - Tax Code.
I announced in budget 2003 that no roll-over relief would be allowed for any purpose on gains arising from disposals on or after 4 December 2002. This relief applied when CGT rates were much higher. In effect, it was a deferral of tax to be paid, where the proceeds of disposal were re-invested into replacement assets. The taxation of these gains would take place following the eventual disposal of the new assets without their replacement.
The abolition of this relief is in accordance with the overall tax policy of widening the tax base in order to keep direct tax rates low. Reliefs and allowances made sense when CGT rates were 40% and above. As the Deputy will be aware, the CGT rate was halved from 40% to 20% in the 1998 budget.
The most logical time to tax capital gains is when they are realised and this change has brought CGT into line with other tax areas. Section 67 of the Finance Act 2003 gave legislative effect to the abolition of this relief and I have no plans to re-introduce it for any sector including the agricultural industry.