Dáil Éireann Debate, Thursday - 25 September 2014
83. Deputy Michael McGrath asked the Minister for Finance if he will amend capital gains tax restructuring relief to provide for the relief from capital gains tax whereby a person sells two separate holdings to consolidate into one holding; and if he will make a statement on the matter. [36398/14]
View answerA relief was introduced in Finance Act 2013 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 the 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.
A prerequisite to any disposal and acquisition of farm land qualifying for this relief is that an application for a farm restructuring certificate is made to Teagasc and that Teagasc grants such a certificate (that has not been withdrawn).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.
The purpose of the relief is to ensure that the sale and purchase of farm land together lead to a reduction in the distance between parcels of land comprised in a farm, thereby leading to an improvement in the viability of the consolidated farm. Depending on the circumstances in any particular case, it may be that the disposal of two separate holdings of land and their replacement with a single holding of equal value may qualify as farm restructuring for the purposes of this relief. This would be a matter for Teagasc to consider in the first instance by reference to the full facts being known.
The farm restructuring relief is one of the measures under consideration in the context of the AgriTaxation Review which I announced in my Budget 2014 speech. The review is be completed shortly and its report is expected to be published around Budget Day. It would not be appropriate for me to comment further in advance of the completion of the review.
