Dáil Éireann Debate, Tuesday - 5 October 2021
189. Deputy Matt Carthy asked the Minister for Finance if he has considered resolving an anomaly whereby if a farm is transferred into joint ownership a spouse is required to own and farm the asset for the next ten years before availing of capital gains tax retirement relief. [48070/21]
View answerAt the outset, the Deputy should note that this matter was raised during a Finance Bill 2020 committee stage debate. As a result a technical note was prepared and sent to the Committee on Finance, Public Expenditure and Reform, and Taoiseach on 23 December 2020. This note provides a good overview of the issue.
For the purpose of this response you should note that Sections 598 and 599 of the Taxes Consolidation Act 1997 provide relief from capital gains tax on the disposal of a qualifying business or farming assets where the person disposing of the asset(s) is aged 55 or over and both owned and used the assets for the ten years prior to the disposal. For the purposes of the relief, qualifying assets include land and other assets used for farming purposes.
In relation to farming assets, the legislation requires that, in order to qualify for the relief, the individual must own and use the assets for the purposes of farming in the ten-year period ending on the disposal. If the individual does not meet the ten-year requirement as set out in the legislation, both in respect of their ownership of, and use of, these assets, the relief from capital gains tax under section 598 and/or section 599 is not available to that individual.
As explained in the technical note to the Committee on Finance, Public Expenditure and Reform, and Taoiseach, I am of the view that there is no basis for changing the existing position as such an amendment could effectively double the relief available to a couple even in cases where one spouse had never used the asset (e.g. worked on the farm), thus undermining the integrity of the relief. Consequently, I could not support such a change.
