Dáil Éireann Debate, Tuesday - 9 October 2012
492. Deputy Michael Healy-Rae asked the Minister for Agriculture; Food and the Marine if there will be a retention of taxation incentives to help achieve growth targets by supporting farm transfer, land mobility and farm investment; and if he will make a statement on the matter. [43980/12]
View answer508. Deputy Nicky McFadden asked the Minister for Agriculture; Food and the Marine if taxation incentives relating to supporting farm transfer, land mobility and farm investment will be retained; and if he will make a statement on the matter. [42904/12]
View answerI propose to take Questions Nos. 492 and 508 together.
Taxation policy is a matter for the Minister for Finance and will be dealt with in the context of the annual budget. However, I am aware of the importance of improving land mobility and of encouraging greater transfer of land, and of the existing challenges in this regard. In order to assist meeting the ambitious targets set out in Food Harvest 2020, new taxation measures were introduced in last year’s budget aimed at improving land mobility and farm consolidation, and encouraging transfers to younger, more progressive farmers. Stamp duty on agricultural land was reduced from 6% to 2%. In addition, half the rate (1%) is now applicable on transfers to close relatives until the end of 2014. This change substantially reduced the stamp duty payable on transfers of farm land by gift or by sale. The measure promotes inter-generational transfer, as the cost of lifetime transfer to transferees who do not qualify for the young trained farmer stamp duty relief has been reduced considerably.
Budget 2012 also restructured the retirement relief available on Capital Gains Tax in order to incentivise the earlier transfer of farm assets to the next generation, and to encourage the sale of land by those farmers with no successors.
Retirement relief was restructured in order to encourage farmers around the normal retirement age, who have successors, to transfer their land and holdings to young, innovative, ambitious, prospective farmers. This measure encourages an improvement in the age profile of farmers, and should ensure that farmland is put to more productive use.
It should be noted that there has been no change to the very important 90% agricultural relief on Capital Acquisitions Tax (CAT). This means that farms worth up to €2.5 million will continue to be fully exempt from CAT with regard to transfers to a child.
