Dáil Éireann Debate, Tuesday - 4 October 2016
139. Deputy Mary Butler asked the Minister for Finance if land leased under conacre arrangements disposed of on or after 1 January 2017, or which is leased for a minimum of five years to a maximum of 25 years, ending with the disposal, will not affect entitlement to capital gains tax relief as long as the land was farmed for ten years by the person making the disposal. [28332/16]
View answerI am advised by Revenue that land which is let can qualify for capital gains tax (CGT) retirement relief in certain circumstances where that land is disposed of on or after 1 January 2017.
An individual aged 55 or over may qualify for relief in respect of land which has been let at any time in the period of 25 years prior to the disposal. In general, land which is let under conacre will not qualify for relief. There are, however, two exceptions to this general rule. The first exception relates to land which is let under conacre and the disposal is to a child of the individual. The second exception is where, during the relevant 25-year period, land which has been let under conacre is taken out of the conacre system and the owner of the land has entered into a lease for a minimum period of 5 years on or before 31 December 2016 and the disposal is to a person other than a child of the individual.
As regards non-conacre lettings, in general terms, relief will apply in circumstances where the land has been let under a lease or leases for a minimum period of at least 5 years in the relevant 25-year period.
An overriding condition of the relief where land is let is that the land must have been owned and used for the purposes of farming carried on by the individual disposing of the land for a period of at least 10 years immediately before the first letting of the land commenced.
Where the individual disposing of the land is aged between 55 and 65 and the disposal is to a person other than his or her child, full relief from CGT applies where the market value of the land does not exceed €750,000. In the case of individuals aged 66 or over, the threshold is reduced to €500,000. Marginal relief may apply where the market value of the land does not greatly exceed either €500,000 or €750,000, as the case may be.
Where the individual is aged between 55 and 65 and the disposal is to a child of that individual, full relief from CGT applies. Where the individual is aged 66 or over, relief is capped at €3m where the market value of the land disposed of exceeds that amount.
