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Tax Exemptions

Dáil Éireann Debate, Tuesday - 1 October 2013

Tuesday, 1 October 2013

Questions (215)

Patrick O'Donovan

Question:

215. Deputy Patrick O'Donovan asked the Minister for Finance in relation to capital gains liability the exemptions available to a farmer (details supplied); and if he will make a statement on the matter. [41089/13]

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Written answers

As I pointed out in a previous reply to a PQ which was tabled by the Deputy in June of this year, I made provision in Budget 2013 for the following measure designed to assist farmers with consolidation of farm land. This measure followed on from measures in the previous year’s Budget which also supported farm expansion and the transfer of land. Section 48 of Finance Act 2013 provides for relief from capital gains tax on disposals of farm land for farm restructuring, subject to a Commencement Order, which I made on 6 June 2013. The terms of the relief are set out in Section 604B, Taxes Consolidation Act 1997.

The relief applies to a sale, purchase or exchange of agricultural land in the period from 1 January 2013 to 31 December 2015 where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes. The initial sale or purchase, or the exchange, must occur in the relevant period and the subsequent sale or purchase must occur within 24 months of that sale or purchase. Full relief from capital gains tax will be given where the consideration for the purchase or the exchange is equal to or exceeds the consideration for the sale or the other land that is exchanged. Where the consideration for the purchase or the exchange is less than the consideration for the land that is sold or the other land that is exchanged, relief will be given in the same proportion that the consideration for the land that is purchased or exchanged bears to the consideration for the land that is sold or the other land that is exchanged.

Provision is made for the clawback of the relief where qualifying land in respect of which relief has been given is disposed of within 5 years of the date of the purchase or exchange of that land. A clawback does not apply where the disposal arises under a compulsory purchase order. It will be noted that this farm restructuring relief is subject to certain conditions being satisfied - including the land in question being “qualifying land” (insofar as Teagasc has issued a farm restructuring certificate in respect of the lands in question, that has not been withdrawn). Guidelines relating to the application for, and the issue of, a Farm Restructuring Certificate are available on the Department of Agriculture, Food and the Marine’s website.

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