I am advised by the Revenue Commissioners that the taxpayer will be chargeable to capital gains tax on her share of the gain, unless she is entitled to retirement relief.
On the transfer of an asset from one spouse to another the spouse acquiring the asset is deemed to have acquired it at the same time and for the same consideration as the other spouse. Accordingly, the chargeable gain is computed by reference to the original cost.
Under section 598 of the Taxes Consolidation Act 1997, an individual who is 55 years or over may obtain retirement relief from capital gains tax on the sale of "qualifying assets". "Qualifying assets" include land used for the purposes of farming carried on by an individual which he/she has owned for a period of at least ten years ending on the date of the sale and which he/she has used for farming throughout that ten year period. As the taxpayer is regarded as having acquired her interest in the land 18 years ago it will treated as a "qualifying asset" providing she has farmed it throughout the period of ten years ending with its sale.
Full retirement relief is available where the proceeds from the disposal do not exceed €500,000. In that case, no tax is charged on the gains arising. If the proceeds exceed €500,000, marginal relief may apply. It should be noted that this limit is an aggregate limit — the relief is limited to an aggregate consideration of €500,000 for all disposals of qualifying assets made after the individual has reached 55 years of age. If the disposal of the property is to a child, and the individual meets the above conditions, the gain is exempt from capital gains tax irrespective of the amount of the proceeds.