Dáil Éireann Debate, Tuesday - 20 October 2015
282. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding capital gains tax relief for farmland sold under a compulsory purchase order; and if he will make a statement on the matter. [36135/15]
View answerThe details supplied suggest a Capital Gains Tax (CGT) rollover relief in respect of the proceeds from the sale of farmland under a Compulsory Purchase Order (CPO). General rollover relief was abolished in Budget 2003. One result of rollover relief was that the CGT due on an asset disposal was often never paid. While the public finances are improving, it is still the case that the yield from the various taxes, including CGT, needs to be protected.
An Agri-Taxation review was carried out last year, the objective of which was to maximise the benefits for the farming sector and the wider economy of the existing level of State support through the tax system. The report of the Review was published in the context of Budget 2015 in October last year. The Review bore Food Harvest 2020, among other things, in mind. It sets out a strategy for agri-taxation policy for the future and concluded that the three main policy objectives are:
1. Increase the mobility and the productive use of land
2. Assist succession
3. Complement wider agriculture policies and schemes, such as supporting environmental sustainability
The Review made policy recommendations, taking into consideration the cost of the existing Agri-taxation measures that were already in existence and the need to protect the position of the public finances. Many of the recommendations made were introduced by way of last year's Budget and Finance Bill process including amendments to income tax land leasing reliefs, CGT Farm Restructuring relief and CGT retirement relief. I announced further measures on foot of the Review's recommendations in my Budget 2016 speech on Tuesday last. However, the Review did not recommend change to the tax treatment of land disposed under a CPO.
I note the concerns of the Deputy and of landowners who have been subject to CPO. However, for the reasons outlined, I have no plans to introduce CGT roll-over relief in respect of gains on land disposed under CPO. I did, however, announce in my Budget 2016 speech that I am introducing a revised CGT entrepreneur relief from 1 January 2016 under which a lower 20% rate of CGT will apply to chargeable gains arising on the disposal of an individual's qualifying business assets (up to a lifetime limit of €1 million). The revised relief will apply to disposals of qualifying business assets by farmers, among others.
