Dáil Éireann Debate, Thursday - 21 July 2016
93. Deputy Pat Deering asked the Minister for Finance the way in which inheritance tax will be treated for transfer of a family farm to a son or daughter if the income from solar panels or wind turbines is part of the transfer. [23448/16]
View answerI am advised by Revenue that where an inheritance is taken from a parent by a son or daughter, the Group A tax-free threshold for Capital Acquisitions Tax (CAT) of €280,000 applies. The son or daughter will not be liable to CAT if the value of the inheritance, when aggregated with all other gifts and inheritances received from a parent since 5 December 1991, does not exceed this threshold. CAT, currently at a rate of 33%, is payable on aggregate inheritances in excess of this threshold.
In addition, where the inheritance consists of agricultural property, including land, it may qualify for relief, known as 'agricultural relief', from CAT once certain conditions are satisfied. Section 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for this relief which takes the form of a 90% reduction in the taxable market value of the gifted or inherited agricultural property.
The person taking the inheritance (the 'beneficiary') of the agricultural property must qualify as a 'farmer' for the purpose of section 89 CATCA 2003. This means, among other conditions, that a beneficiary's agricultural property must comprise at least 80% by gross market value of the beneficiary's total property at a particular date. Revenue take the view that land on which a wind turbine or solar panels are installed is not agricultural property.
Thus, depending on the amount of an individual's land that is actually occupied by wind turbines or solar panels, the use of agricultural land for wind turbines or a solar farm may result in a beneficiary not meeting the '80%' test to qualify for agricultural relief.
