Dáil Éireann Debate, Tuesday - 11 November 2014
210. Deputy Mattie McGrath asked the Minister for Finance the reasons beneficiaries of changes made to agricultural relief under capital acquisitions tax must spend not less than 50% of their normal working time farming agricultural property; his views that the percentage is arbitrary and unworkable; and if he will make a statement on the matter. [43118/14]
View answerIn my Budget 2014 speech I announced that an Agri-Taxation Review would be undertaken. The review has been carried out and its report was published on Budget Day this year, 14 October. A key objective of the review is to encourage improved productivity in farming. There are concerns that the definition of 'farmer' for the purposes of CAT agricultural relief was not sufficiently robust to ensure that this relief is only being availed of by active, productive farmers. There have also been suggestions that the relief is being used as a tax efficient inter-generational wealth transfer mechanism for non-family farms.
To address these concerns and to encourage improved productivity in farming, changes to CAT agricultural relief were provided for in the Finance Bill 2014 as published. Assuming the other conditions of the relief are satisfied, the changes confine the relief to two categories.
Firstly, the relief will be available to an individual who, for a period of not less than six years, commencing on the valuation date of the gift or inheritance, spends not less than 50% of his or her normal working time farming agricultural property, including the agricultural property comprised in the gift or inheritance, on a commercial basis and with a view to the realisation of profits from that agricultural property.
Secondly, the relief can be available to an individual who leases the whole or substantially the whole of the agricultural property comprised in the gift or inheritance for a period of not less than six years, commencing on the valuation date of the gift or inheritance, to an individual who spends not less than 50% of his or her normal working time farming agricultural property, including the leased agricultural property, on a commercial basis and with a view to the realisation of profits from that agricultural property.
Concerns have been raised with me by various interests about the definition of 'active' farmer for the purpose of the amendments detailed above. I will consider these concerns and see if further amendments to the provisions are warranted on Committee Stage of the Bill.
