Dáil Éireann Debate, Tuesday - 30 June 2015
256. Deputy Michael Creed asked the Minister for Finance the tax treatment of payments received for lands compulsorily acquired for new road construction; the tax treatment of these payments where it is proposed to reinvest this compensation payment in new agricultural lands; and if he will make a statement on the matter. [26155/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that Capital Gains Tax (CGT) is charged in respect of a gain arising on a disposal of land compulsorily acquired for new road construction. The gain is treated as arising in the year in which the compensation is paid. The first €1,270 of such a gain is exempt from CGT where a disposal is made by an individual and that individual did not have any other gains in the year in which the disposal occurred. The current rate of CGT is 33%.
No specific relief from CGT is available where a payment received for lands compulsorily acquired for new road construction is reinvested in other agricultural land.
I also understand that when agricultural land is acquired under a compulsory purchase order (CPO), the acquiring authorities usually pay a premium over the agricultural value. The premium may cover the tax due on the disposal and the farmer may well have received the agricultural value of the land in his or her net proceeds after disposal. This means farmers are generally able to buy agricultural land of equivalent value to the land acquired under the CPO.
