Michael D'Arcy
Ceist:136. Deputy Michael D'Arcy asked the Minister for Finance if the 40% tax break on land lease applies to a lease for a renewable solar energy resource. [14087/16]
Amharc ar fhreagraThursday, 2 June 2016
Ceisteanna (136)
Freagraí scríofa
I understand that the Deputy's question refers to the income tax exemption available under section 664 of the Taxes Consolidation Act 1997 (TCA) in respect of certain income derived by lessors from the leasing of farm land. The relief is available, subject to a maximum limit, where farm land is leased to a qualifying lessee for a period of 5 years or more. Farm land is defined for the purposes of the relief and includes land in the State which is wholly or mainly occupied for the purpose of husbandry. The farm land must be used by the lessee for the purpose of a trade of farming on the land.
It is considered that land which is leased for the production of renewable energy (such as the installation of solar panels on the land) does not qualify as farm land for the purpose of section 664 relief. In addition, the installation of renewable energy equipment and the activities associated with the generation of renewable energy would not be regarded as a trade of farming for the purpose of the exemption. Therefore, in general, leases of land for the production of renewal energy will not be eligible for the relief. The Revenue Commissioners have published a recent eBrief which specifically clarifies the application of section 664 TCA in respect of leases to solar energy development companies. The eBrief can be accessed on Revenue's website at http://www.revenue.ie/en/practitioner/ebrief/2016/no-532016.html.