Dáil Éireann Debate, Tuesday - 5 October 2021
187. Deputy Matt Carthy asked the Minister for Finance if he has considered changing the criteria for agricultural relief in order that 90% relief would apply whereby a family farm is transferred into both spouses' names and either of the spouses meets the 80% asset test and active farming requirement; and if he will make a statement on the matter. [48068/21]
View answerAgricultural Relief is a very valuable relief in the Capital Acquisitions Tax (CAT) regime. It allows the value of agricultural assets inherited (including farmland, buildings, stock) to be reduced by 90% of its value for the calculation of the CAT liability.
There are certain conditions which the beneficiary must meet order to avail of the relief, including that at least 80% of the total assets held by the beneficiary after receiving the gift/inheritance must be agricultural assets, and the beneficiary must be an ‘active farmer’.
I note the Deputy's suggestion that Agricultural Relief should apply where the farm is transferred into both spouses' names where the conditions are met by either of the spouses.
My officials have advised that the current operation of the relief, does not appear to be a barrier to participation in agriculture as outlined in the Deputy's proposal and the result (joint ownership) can be achieved without a requirement for legislative change.
This is because it is a long-held principal of the CAT regime that transfers of property between spouses is not subject to CAT.
Therefore, following a transfer of a family farm in the manner outlined by the Deputy, the farm can be jointly held by both spouses without any clawback of the Agricultural Relief.
