Dáil Éireann Debate, Tuesday - 29 March 2022
272. Deputy Jackie Cahill asked the Minister for Finance if the circumstances in relation to a partnership (details supplied) meet the criteria for the taxation exemption on land leasing; and if he will make a statement on the matter. [16462/22]
View answerI am advised by Revenue as follows:
Section 664 of the Taxes Consolidation Act 1997 sets out the criteria which must be met for relief for certain income from the leasing of farmland to be allowed. Farmland must be let by a qualifying lessor under a qualifying lease to a qualifying lessee. The amount of the relief is subject to certain limitations.
A qualifying lessee may be an individual or a company provided certain other conditions are met.
The lessee must carry on a trade of farming on the leased land either solely or in partnership with a person or persons who is also a qualifying lessee on a commercial basis with a view to the realisation of profits. In addition to this requirement, a lessee must not be connected with the lessor or with any of the lessors if there is more than one. Where there is more than one lessor all the lessees must be unconnected with all of the lessors.
Connected persons is defined in section 10 of the Taxes Consolidation Act 1997 and provides that “a person shall be connected with an individual if that person is the individual’s husband, wife or civil partner, or is a relative, or the husband, wife or civil partner of a relative, of the individual or of the individual’s husband, wife or civil partner.” A relative for these purposes includes immediate family e.g. grandparents, parents, brothers, sisters, children, grandchildren, etc.
The details supplied do not set out the full particulars of the familial relationship between the parties involved and, specifically the relationship between the father and the aunt. Where the aunt is connected to the father because either she is his sister or the sister of his wife or civil partner, relief under section 664 would not be available as both the nephew and his father must be unconnected to the lessors. I am advised by Revenue that there is guidance available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-23/23-01-23.pdf, which sets out the relevant conditions of the relief and provides further details of the rules in relation to connected parties.
