As the Deputy will recall, the advice that I have received from Revenue is that the leasing of land to the spouse or civil partner of a brother or sister of the lessor or the leasing of land to the brother or sister of a spouse or civil partner of a lessor is regarded as a lease between connected persons and is not eligible for relief on the long-term leasing of farm land.
Section 664 of the Taxes Consolidation Act 1997 provides relief from income tax for certain income from long-term leasing. The relief is available, subject to a maximum limit, where farm land is leased to a qualifying lessee for a period of five years or more. In order to qualify as a qualifying lessee for the purpose of the relief, the lessee must not be connected with the lessor, or with any of the lessors if there is more than one. The rules for establishing whether or not persons are connected are laid down by Section 10 of the Taxes Consolidation Act 1997 which sets out that a lessor is not entitled to relief where the land is let to family members or family members of their spouse or civil partner.
The restriction on leases between connected persons is intended to prevent the misuse of the exemption. In addition, allowing relief in cases where the land was leased to connected persons could delay succession or lead to the fragmentation of holdings.
The connected party restriction has applied since the introduction of the relief over 30 years ago and I have no plans at present to alter the restriction. However, as with all such reliefs, my Department regularly reviews tax expenditure measures. Proposals for change are dealt with in the context of the annual Budget and Finance Bill process.