Dáil Éireann Debate, Tuesday - 4 March 2014
358. Deputy Paul J. Connaughton asked the Minister for Agriculture, Food and the Marine if the exemption for capital gains tax in relation to land which has been leased for the past five years is available in cases where land has been rented for five years; and if he will make a statement on the matter. [10860/14]
View answerRetirement Relief from Capital Gains Tax (CGT) is available where an individual, who is at least 55 years of age (with some exceptions such as chronic ill-health) disposes, by way of sale or gift, of the whole or part of his or her qualifying assets. The amount of retirement relief from CGT available is dependent on whether qualifying assets transferred are: 1) Parent to child transfers, or, 2) Transfers other than to a child.
Retirement Relief from CGT – Parent to child transfers
Irrespective of the amount of consideration for the disposal, full relief may be claimed by an individual aged 55 – 65 years of age on the disposal of the whole or part of his or her qualifying assets to his or her child. Full relief may be claimed in respect of the consideration for the disposal of qualifying assets worth up to €3 million in the case of individuals aged 66 years or more with effect from the 1 January 2014. Where the consideration exceeds €3 million, relief will be given in respect of the CGT chargeable on any gain accruing on the disposal by individuals aged 66 or more as if the consideration for the disposal had been €3 million.
The upper limit on relief for transfers by individuals aged 66 years or more was introduced in Budget 2012, but a lead in period was flagged to allow for an orderly transition.
The relief is clawed back where the child disposes of an asset within 6 years of the date of acquisition from his or her parent. For parent to child transfer a child can include a child of a deceased child. Foster child or nephew/niece transfers may also qualify in certain circumstances provided further specific qualifying criteria are met.
Retirement Relief from CGT – Transfers other than to a child
From the 1 January 2014 where the disposal consideration does not exceed €750,000, relief from CGT is given in respect of the full amount of tax chargeable on the disposal in the case of an individual aged 55 – 65 years of age. The amount of full relief for individuals aged 66 years or more has been reduced from €750,000 to €500,000. This was introduced in Budget 2012, but a lead in period was flagged to allow for an orderly transition.
Where the consideration exceeds the thresholds set out above, marginal relief applies so as to limit the amount of tax chargeable to 50% of the difference between the amount of the disposal consideration and €750,000/€500,000 thresholds.
I have on-going contact with the Minister for Finance to ensure that tax policy reflects the Government’s commitment to agriculture and, in particular, to the objectives of smart, green, growth outlined in the Food Harvest 2020 strategy. A review of tax measures in the farming sector, a joint initiative between my Department and the Department of Finance, was announced in Budget 2014 and is now underway.
