Dáil Éireann Debate, Wednesday - 13 October 2004
105 Mr. McHugh asked the Minister for Finance if he will extend the relief from stamp duty to farmers below the age of 55 years on the purchase of farmland by trained farmers in cases in which lands are being purchased to consolidate holdings and reduce fragmentation in pursuance of farm capacity building. [24760/04]
Amharc ar fhreagra107 Mr. McHugh asked the Minister for Finance if farmers will be given support to help bring about a situation whereby stamp duty will not apply on land purchased by trained farmers in cases in which lands are being purchased to consolidate holdings and reduce fragmentation in pursuance of farm capacity building. [24762/04]
Amharc ar fhreagraI propose to take Questions Nos. 105 and 107 together.
The Deputy may be aware that the stamp duty code contains full stamp duty relief for transfers of land to young trained farmers where land is transferred to them by way of gift or sale, provided they have attained relevant educational qualifications. This exemption encourages the more productive use of agricultural land. The availability of the relief was extended in budget 2003 for a further three years to 31 December 2005. The Finance Act 2004 provided for an updated list of educational qualifications and contained changes which resulted in the raising of the standards of certain of those qualifications which must be attained in order to qualify for the relief.
The relief, which is considered generous, is intended to encourage the transfer of land to young farmers who have successfully undergone training. The "young trained farmer" must be under 35 years of age at the date of execution of the transfer in order to satisfy the conditions for the stamp duty relief. The relief specifically focuses on "young" farmers with relevant training, and the current age limit and qualification requirements in respect of this relief are considered very reasonable. Any extension would dilute the focus of the relief.
As Deputies are aware, it is not the practice to comment in the lead up to the annual budget and Finance Bill on the intention or otherwise to make changes in taxation.
106 Mr. McHugh asked the Minister for Finance if he will exempt farmers from capital gains tax on the disposal of lands in cases in which the proceeds of the disposal are utilised to consolidate holdings to reduce fragmentation and are applied in the acquisition of other farm land to achieve this within a specified period, such that the lands being disposed of and the replacement land be deemed to be the one and the same land for the purpose of subsequent disposals. [24761/04]
Amharc ar fhreagra108 Mr. McHugh asked the Minister for Finance if farmers will be given support to help bring about a situation whereby capital gains tax will not apply on land disposals in cases in which proceeds are re-invested into replacement land to help reduce fragmentation of farms in order to consolidate holdings, improve land utilisation and build productive capacity. [24763/04]
Amharc ar fhreagraI propose to take Questions Nos. 106 and 108 together.
Capital Gains Tax, CGT, is a tax on a capital gain arising on the disposal of assets. A 20% rate of CGT applies on the gains arising on the disposal of assets, including farmland. It was announced in the 2003 budget that no rollover relief would be allowed for any purpose on gains arising from disposals on or after 4 December 2002. This relief was introduced when CGT rates were much higher than current levels. In effect, it was a deferral of tax to be paid, where the proceeds of disposal were re-invested into replacement assets. The taxation of these gains would take place following the eventual disposal of the new assets without their replacement.
The abolition of this relief was in accordance with the overall taxation policy of widening the tax base in order to keep direct tax rates low. Such reliefs and allowances made sense when CGT rates were 40% and above. As the Deputy may be aware, the rate was halved from 40% to 20% in budget 1998. Taxing capital gains when they are realised is the most logical time to do so, and this change brought CGT into line with other areas.
It is not the practice to comment in the lead up to the annual budget and Finance Bill on the intention or otherwise to make changes in taxation.
