Dáil Éireann Debate, Tuesday - 13 June 2023
366. Deputy Claire Kerrane asked the Minister for Finance the full-year cost of extending consanguinity relief and acceleration of wear and tear allowances for farm safety equipment relief in 2024; and if he will make a statement on the matter. [27585/23]
View answerConsanguinity relief is a long-standing stamp duty relief which is available only in respect of farmland. It serves to reduce the stamp duty rate applicable to the acquisition of farmland by qualifying individuals from the current standard rate on non-residential property of 7.5 per cent to 1 per cent. It was last extended (by three years) in Finance Act 2020, so is currently due to expire at the end of 2023.
The purpose of the relief is to facilitate and encourage inter-generational farm transfers in line with both Government and EU policy.
Under the primary (but not sole) condition for claiming this relief, you must:
• be related to the transferor; and
• farm the land for at least six years or lease it for a minimum of six years to someone who will farm it.
I am advised by Revenue that the cost of consanguinity relief is published in the Cost of Tax Expenditures report on the Revenue website at:
www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf. The cost of extending the relief is estimated to be in the region of the cost for the latest published year, 2022 - that is €52.5m.
The acceleration of wear and tear allowances for farm safety equipment is provided for under Section 285D Taxes Consolidation Act 1997 (TCA). Introduced with effect from 1 January 2021, this scheme is currently due to expire on 31 December 2023. Subject to certification of eligible expenditure by the Minister for Agriculture, Food and the Marine, the scheme allows persons carrying on a trade of farming to claim wear and tear allowances on such expenditure over a period of two instead of eight years, subject to a maximum tax benefit of €500,000 per undertaking.
This scheme of accelerated capital allowances is aimed at incentivising the purchase of farm safety equipment and the replacement of equipment that may be old or sub-standard as well as assisting farmers who have a disability to continue work through the purchase of certain adaptive equipment. The farm safety equipment which qualifies is set out in a table in Part 2 of Schedule 35 TCA.
An overall annual budget of €5 million (excluding VAT) applies to this scheme, meaning that in any one year, the cumulative expenditure on equipment which qualifies for the relief is restricted to that amount, as tracked by the Department of Agriculture, Food and the Marine.
I am advised by Revenue that claims in respect of this accelerated tax relief were included for the first time on the 2021 Income Tax return and on the 2022 Corporation Tax return respectively. As the majority of the 2022 Corporation Tax returns are not due until later this year and will not be fully analysed until after that time, Revenue further advise that the data are not yet available to provide an accurate estimate the full-year cost of extending this measure into 2024.
However, at the time of Finance Bill 2020, my Department estimated that the measure would have a maximum up-front tax cost of €1.5 million per annum although the net cost over eight years would be closer to neutral.
