Written Answers Nos. 170-192
170. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question Nos. 35, 36 and 37 of 22 September 2021, the total amount in nominal terms of tax relief on pension contributions made by employees with gross pay above €300,000, €250,000, €200,000, €150,000 and €100,000, respectively in 2019. [47689/21]
Amharc ar fhreagraI am advised by Revenue that it is not yet possible to accurately report the cost of tax relief associated with pension contributions reported on employer returns.
Some of these taxpayers will be jointly assessed, as such their incomes and reliefs are combined with their partner’s in calculating their tax liability. For such jointly assessed taxpayer units, either of the spouses or partners may have non-PAYE incomes.
The totality of income and reliefs on a taxpayer unit basis will be available once the full data, i.e. for both employees and self-assessment persons, for 2019 are available. These data are being processed and are expected to be available in the coming months.
171. Deputy Mary Butler asked the Minister for Finance if he will address the concerns raised by green growers in correspondence (details supplied) in the context of the carbon tax and Budget 2022; if he is satisfied that the future of this industry has been adequately safeguarded given the points raised in correspondence; and if he will make a statement on the matter. [47723/21]
Amharc ar fhreagraMineral Oil Tax (MOT) applies to minerals oils used for motor or heating purposes in the State. The rate of MOT is comprised of a carbon and non-carbon component.
I am advised by Revenue that Section 98 of Finance Act 1999 provides for a partial relief for MOT for heavy oil and liquefied petroleum gas (LPG) used in horticultural production and the cultivation of mushrooms. Heavy oil refers to diesel, kerosene, and fuel oil, and LPG is defined in MOT legislation as “petroleum gases and other gaseous hydrocarbons falling within CN Codes 2711 12 11 to 2711 19 00”. The relief is operated by way of repayment only. The repayment amount is the difference between the MOT paid and the predetermined rate set out in section 98 for heavy oil/LPG. More information on the operation of the relief is also available on Revenue’s website.
With regard to carbon tax and Budget 2022, as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
The Deputy will also be aware that there are support schemes and investment aid available to horticultural producers from the Department of Agriculture, Food and the Marine and Bord Bia. Full details are available at the website addresses below.
www.gov.ie/en/service/d6dde0-commercial-horticulture-investment-aid-scheme-2020/
www.bordbia.ie/farmers-growers/get-involved/how-we-help/
172. Deputy Neale Richmond asked the Minister for Finance if he will conduct a review of the deemed disposal rule that leads to tax being charged on exchange traded funds every eight years even if the profits have not been realised; and if he will make a statement on the matter. [47779/21]
Amharc ar fhreagraAn Exchange Traded Fund (ETF) is an investment fund that is traded on a regulated stock exchange. There is no separate taxation regime specifically for ETFs. Being collective investment funds, they generally come within the regimes set out in the TCA 1997 for such funds.
The normal tax treatment afforded to Irish collective investment funds is that the funds invested are allowed to grow on a tax-free basis within the fund. The income is taxed at the level of the investor rather than the fund, as is standard international practice. Most OECD countries have a tax system that provides for neutrality between direct investments and investments through a Collective Investment Vehicle/Fund.
Funds are obliged to operate an exit tax regime and remit the tax deducted in this manner to Revenue. This ensures that appropriate tax is collected from Irish investors. This charge to tax does not apply in the case of unit holders who are non-resident. In the case of non-resident investors’, liability to tax on gains from the fund will be determined in their home jurisdiction.
There is a charge to tax on Irish residents on the happening of a “chargeable event”. In order to prevent the indefinite deferral of a chargeable event (and therefore an exit charge), a deemed disposal occurs 8 years following inception of a policy of life assurance or acquisition of a fund and then every 8 years thereafter.
Any gain on the investment which arises from the date of inception or acquisition to the date of the deemed disposal is subject to tax. This ensures that income isn’t rolled up indefinitely in funds or life assurance policies without being subject to tax. On the ultimate disposal of the investment, any tax paid which arose as a result of a deemed disposal is allowed as a credit against any final tax liability on disposal.
There are currently no plans to conduct a review the 8 year deemed disposal rule.
173. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if he has plans to introduce tax reduction measures for the Irish fishing industry that would allow expenses such as harbour fees, ice plant fees and slip off fees for paint and repair to be written off against annual tax returns; and if he will make a statement on the matter. [47824/21]
Amharc ar fhreagraProposals for new or amended tax measures are assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances, for example where there are demonstrable market failures. In particular, they provide that a tax-based incentive should only be considered where it would be more efficient than a direct expenditure intervention.
The introduction of such measures is a matter that would generally fall to be considered in the context of the annual Budget and Finance Bill.
174. Deputy Dara Calleary asked the Minister for Finance if his attention has been drawn to a settlement between a State agency (details supplied) and the Revenue Commissioners; if there are any agencies under his Department’s remit that have had a similar issue or have made a settlement with the Revenue Commissioners in relation to any issue in the past five years; and if he will make a statement on the matter. [48023/21]
Amharc ar fhreagraIn the absence of any reference at the Public Accounts Committee meeting on 28th September 2021 to a settlement made by the Sea Fisheries Protection Authority with the Revenue Commissioners, I am taking it that the Deputy is referring to the issue of a salary overpayment at that agency which was one of the issues discussed at the meeting.
On that basis, I can confirm that in the past five years there have been no instances of salary overpayments in the State Agencies under the aegis of my Department.
Regarding the matter of settlements with the Revenue Commissioners, the Central Bank, in October 2017, made an unprompted qualifying disclosure to the Revenue Commissioners which resulted in a request for a refund of €429,449. This was subsequently disclosed on the Central Bank’s 2018 Financial Statements (Page 204 Note 8 (iii)) which declares “Included in other income is net income of €0.4m (2017: Nil) arising from an indirect taxes review undertaken by the Central Bank and agreed with Revenue”.
There were two unprompted voluntary disclosures made by the National Asset Management Agency (NAMA) to the Revenue in the last five years. In 2017, an unprompted voluntary disclosure of €0.6m was made to the Revenue with regard to the treatment of Professional Services Withholding Tax (PWST) to professional services providers that were not engaged by NAMA. A further payment of €1.9m in relation to this disclosure was made in 2021. In 2018, an unprompted voluntary disclosure of €1.9m was made to the Revenue with regard to the treatment of VAT on professional services received from outside of Ireland.
175. Deputy Matt Carthy asked the Minister for Finance the amount of VAT raised through the sale of bovine sexed semen in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48054/21]
Amharc ar fhreagra178. Deputy Matt Carthy asked the Minister for Finance the amount of VAT raised in each of the years 2016 to date with regard to forage and lab analysis and faecal egg lab testing; and if he will make a statement on the matter. [48058/21]
Amharc ar fhreagra179. Deputy Matt Carthy asked the Minister for Finance the amount of VAT raised on farm disinfectants and hygiene products in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48059/21]
Amharc ar fhreagra182. Deputy Matt Carthy asked the Minister for Finance the estimated cost of exempting from VAT all non-oral animal health medicines; and if he will make a statement on the matter. [48062/21]
Amharc ar fhreagra183. Deputy Matt Carthy asked the Minister for Finance the current VAT rate on low emissions slurry spreading technology; the estimated cost of reducing that rate to 13% and to 0%; and if he will make a statement on the matter. [48063/21]
Amharc ar fhreagra185. Deputy Matt Carthy asked the Minister for Finance the number of VAT registered farmers within the State; the amount of tax relief claimed to date on farm safety equipment by VAT registered farmers; and if he will make a statement on the matter. [48065/21]
Amharc ar fhreagra210. Deputy Matt Carthy asked the Minister for Finance the number of non-VAT registered farmers within the State; and if he will make a statement on the matter. [48095/21]
Amharc ar fhreagra211. Deputy Matt Carthy asked the Minister for Finance the estimated cost of allowing non-VAT registered farmers claim tax relief against farm safety equipment; and if he will make a statement on the matter. [48096/21]
Amharc ar fhreagraI propose to take Questions Nos. 175, 178, 179, 182, 183, 185, 210 and 211 together.
I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. Farmers may elect to register for VAT or be treated as flat-rate farmers for VAT purposes. Farmers that are registered for VAT have an entitlement to reclaim VAT charged on costs incurred in relation to the farm business, including VAT borne on the purchase of agricultural equipment and non-oral animal medicines. Farmers that are not registered for VAT are compensated for the VAT incurred on goods and services used in the course of their farming business, through the flat rate addition they receive on payments for their supplies of agricultural produce and services.
In accordance with Irish VAT legislation, slurry-spreading equipment is liable to VAT at the standard rate, currently 23%, and there is no discretion, under the Directive, to reduce this VAT rate as suggested by the Deputy. The supply of non-oral animal medicines is subject to the standard rate of VAT, currently 23%, but it is not possible, under the Directive, to exempt the supply of these goods as suggested by the Deputy.
I am further advised by Revenue that the information provided on tax returns does not require the VAT charged or paid on individual products or activities to be separately identified. Therefore, the amount of VAT paid (or refunded) in relation to any specific product or activity, or the cost of exempting specific products or activities from VAT is not separately available. Furthermore, the measure to allow for accelerated capital allowances for the purchase of farm safety equipment was only introduced in 2021 for which income tax returns are not due until late 2022.
Revenue inform me that the number of live VAT registrations in the agriculture, forestry and fishing sector is 12,700. This does not include taxpayers involved in the farming sector who may be classified under a different sector due to engaging in other activities in addition to farming. As set out in Revenue’s farming statistics reports, available at www.revenue.ie/en/corporate/documents/research/farming-profile-2020.pdf, these VAT registered cases form a small proportion of the total of some 148,000 farmers registered with Revenue for tax purposes.
176. Deputy Matt Carthy asked the Minister for Finance the number of farmers who claimed €70,000 in young farmer reliefs in each of the years 2016 to 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [48055/21]
Amharc ar fhreagraI am advised by Revenue that due to the very small number of taxpayers meeting the criteria outlined in any year for which data are available, and its obligations to maintain taxpayer confidentiality at all times, it is not possible to disclose the exact number of taxpayers in this category.
177. Deputy Matt Carthy asked the Minister for Finance the estimated cost of increasing the age young farmers can claim stamp duty relief to 40; and if he will make a statement on the matter. [48057/21]
Amharc ar fhreagra199. Deputy Matt Carthy asked the Minister for Finance if consideration has been given to increasing the State aid limit to young farmers regarding stamp duty; the engagements he has had and the actions that have been taken in this regard; and if he will make a statement on the matter. [48083/21]
Amharc ar fhreagra207. Deputy Matt Carthy asked the Minister for Finance if consideration has been given to allowing young farmers to submit and have their business plans approved by Teagasc within 12 months of claiming young, trained farmer stamp relief duty; and if he will make a statement on the matter. [48092/21]
Amharc ar fhreagra208. Deputy Matt Carthy asked the Minister for Finance if he plans to renew young, trained farmer stamp duty relief in 2022; and if he will make a statement on the matter. [48093/21]
Amharc ar fhreagraI propose to take Questions Nos. 177, 199, 207 and 208 together.
Stamp duty relief for young trained farmers provides for a total exemption from stamp duty (currently 7.5%) on either the transfer by gift, or purchase, of farmland (and associated buildings) where the recipient is a trained farmer under the age of 35 and meets other specified criteria. It is legislated for in Section 81AA on the Stamp Duties Consolidation Acts 1999 (SDCA 1999), titled “Transfers to young trained farmers”,
As with all such reliefs, it is subject to a number of terms and conditions. Section 81AA was introduced in Finance Act 2000, has since been extended on a number of occasions, and is currently due to expire on 31 December 2021.
The primary domestic and EU policy objective of this relief is to encourage the inter-generational transfers of agricultural land, with a secondary purpose being to increase the level and rate of adoption of new more productive and more environmentally friendly farming practices.
I expect to announce my plans for the future of this relief as part of Budget 2022, which I will be presenting on October 12th this year.
In respect of age limits, I am assuming the Deputy is again referring to the young trained farmer stamp duty relief. Section 81AA SDCA 1999) states in subsection (1) a “young trained farmer” is defined (in part) as being a “person who has not attained the age of 35 years on the date on which the instrument, in respect of which the relief is being claimed under this section, was executed... ”.
It is the view of the Department of Agriculture, Food and the Marine, that the age limit of 35 is appropriate, and should be retained. I support this view. This view is taken on the basis that, in order to seek to address the problems with the age profile of Irish farmers, 35 years of age as the cut-off point for availing of tax reliefs rather than a later age, is more likely to boost the incentive to, and benefit from age capped reliefs such as this one. Any increase in the age limit for this relief would only serve to reduce its intended effectiveness in this regard.
In regards to the state aid limit, Sections 21 and 48 of the Finance Act 2018 articulate the EU state aid related €70,000 lifetime limit that any one farmer can receive cumulatively under three farming related tax reliefs:
- the Young Trained Farmer stamp duty relief,
- the stock relief for young trained farmers and
- the succession farm partnerships tax credit.
This is in accordance with Article 18 of EU Regulation 702/2014. The reason that this limit was put in the Finance Act in 2018 was to provide clarity on these rules, which had existed since 2014.
As this limit is linked to an EU regulation, it is not possible to change it unilaterally. I do however understand that my colleague, the Minister for Agriculture, Food and the Marine, Mr. Charlie McConalogue T.D. has been seeking to have this issue addressed as part of the ongoing renegotiation of the Common Agricultural Policy.
To conclude, one of the conditions for availing of the Young Trained Farmer stamp duty relief is that an applicant must submit a business plan to Teagasc.
The submission of a business plan is a requirement under the EU state aid rules, and the Young Trained Farmer relief would not qualify as a permitted state aid under the ABER (Agricultural Block Exemption Regulation) without such a plan being required .
The IFA have proposed that it should be permissible for a business plan to be submitted up to 12 months after the relief is claimed. Allowing the submission of a business plan after an applicant had enjoyed the benefits of the relief, even with the introduction of the potential for a Revenue clawback in circumstances where a business plan was not supplied, is likely to weaken the relief’s case for being deemed a permissible state aid, and to be administratively burdensome.
I therefore have no plans to make a change of the type sought by the IFA.
180. Deputy Matt Carthy asked the Minister for Finance the estimated cost of increasing the age to avail of enhanced stock relief for young, trained farmers to 40; and if he will make a statement on the matter. [48060/21]
Amharc ar fhreagra200. Deputy Matt Carthy asked the Minister for Finance the amount raised in enhanced stock relief for young, trained farmers aged 35 to 40, 41 to 45, 46 to 50 and 50+ in each of the years 2016 to 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [48085/21]
Amharc ar fhreagra201. Deputy Matt Carthy asked the Minister for Finance if he plans to renew enhanced stock relief for young, trained farmers in 2022; and if he will make a statement on the matter. [48086/21]
Amharc ar fhreagra202. Deputy Matt Carthy asked the Minister for Finance the amount of relief claimed via enhanced stock relief for young, trained farmers; the number of those availing of the relief in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48087/21]
Amharc ar fhreagraI propose to take Questions Nos. 180 and 200 to 202, inclusive, together.
Section 667B of the TCA provides for a scheme of enhanced stock relief at the rate of 100% for “qualifying farmers” (who are often referred to as young trained farmers). The measure is due to sunset on 31 December 2021.
I am advised by Revenue that tax returns do not contain the level of detail necessary to determine the number of relevant farmers up to 40 years of age who will meet the criteria required to claim the enhanced stock relief for young trained farmers, specifically the requirement that the taxpayer satisfies the academic and training standards. Therefore, Revenue further advise that it is not possible to estimate the cost of the policy measure outlined.
In relation to the amount claimed in enhanced stock relief, farmers in the age groups outlined by the Deputy are not eligible for the enhanced stock relief for young trained farmers, which is only available to farmers under the age of 35.
I am also advised by Revenue that the amount of relief claimed via enhanced stock relief for young trained farmers and the number of those availing of the relief are available on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf.
The following table contains data up to and including 2018, the latest year for which returns are currently available:
|
- |
2018 |
2017 |
2016 |
|
No. of participants |
420 |
530 |
500 |
|
Cost (€m) |
1.2 |
1.5 |
1.4 |
This measure is due to sunset on 31 December 2021. As the Deputy will appreciate, matters concerning the introduction of new reliefs and the extension of existing reliefs fall to be considered by me in the context of the annual Budget and the subsequent Finance Bill. That process is underway.
181. Deputy Matt Carthy asked the Minister for Finance if he plans to extend stock relief on replacement livestock in 2022; and if he will make a statement on the matter. [48061/21]
Amharc ar fhreagraSection 668 of the Taxes Consolidation Act 1997 provides for a special application of general stock relief for farmers in respect of profits accruing as a result of the disposal of stock under statutory disease eradication measures. The special tax treatment operates in accordance with section 666 (general stock relief) but applies 100% (instead of 25%) relief in these specific circumstances.
Section 666 is due to sunset on 31 December 2021. As the Deputy will appreciate, matters concerning the introduction of new reliefs and the extension of existing reliefs fall to be considered by me in the context of the annual Budget and the subsequent Finance Bill. That process is underway.
184. Deputy Matt Carthy asked the Minister for Finance the amount of carbon tax raised in relation to glasshouse growers in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48064/21]
Amharc ar fhreagraI am advised by Revenue that carbon tax receipts for each year since its introduction in 2010 up to 2020 are published on the Revenue website at: www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx
I am informed that receipts from Carbon Tax in relation to glasshouse growers are not available.
186. Deputy Matt Carthy asked the Minister for Finance the estimated cost of including agricultural land which is subject to compulsory purchase order in capital gains tax entrepreneurial relief; and if he will make a statement on the matter. [48067/21]
Amharc ar fhreagraI am informed by Revenue that statistical information in respect of entrepreneurial relief is available on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/entrepreneur-relief-statistics.pdf. This includes the share of relieved disposal consideration related to agricultural land or buildings.
The cost of extending this relief to agricultural land disposals that are made on foot of compulsory purchase orders and do not currently qualify for entrepreneurial relief, is tentatively estimated to be in the region of €0.2m. This is based on CGT returns for the year 2018, the latest year available. This estimate is highly tentative as patterns of agricultural land disposal are not consistent from year to year.
187. Deputy Matt Carthy asked the Minister for Finance if he has considered changing the criteria for agricultural relief in order that 90% relief would apply whereby a family farm is transferred into both spouses' names and either of the spouses meets the 80% asset test and active farming requirement; and if he will make a statement on the matter. [48068/21]
Amharc ar fhreagraAgricultural Relief is a very valuable relief in the Capital Acquisitions Tax (CAT) regime. It allows the value of agricultural assets inherited (including farmland, buildings, stock) to be reduced by 90% of its value for the calculation of the CAT liability.
There are certain conditions which the beneficiary must meet order to avail of the relief, including that at least 80% of the total assets held by the beneficiary after receiving the gift/inheritance must be agricultural assets, and the beneficiary must be an ‘active farmer’.
I note the Deputy's suggestion that Agricultural Relief should apply where the farm is transferred into both spouses' names where the conditions are met by either of the spouses.
My officials have advised that the current operation of the relief, does not appear to be a barrier to participation in agriculture as outlined in the Deputy's proposal and the result (joint ownership) can be achieved without a requirement for legislative change.
This is because it is a long-held principal of the CAT regime that transfers of property between spouses is not subject to CAT.
Therefore, following a transfer of a family farm in the manner outlined by the Deputy, the farm can be jointly held by both spouses without any clawback of the Agricultural Relief.
188. Deputy Matt Carthy asked the Minister for Finance the number of granted applications for agricultural relief in each of the years 2016 to date; the number of joint applications; the number of single applications; the number of sole female applications; the amount of relief provided in bands; and if he will make a statement on the matter. [48069/21]
Amharc ar fhreagra203. Deputy Matt Carthy asked the Minister for Finance the amount of relief claimed via young, trained farmer stamp duty relief; the number of those availing of the relief in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48088/21]
Amharc ar fhreagra205. Deputy Matt Carthy asked the Minister for Finance the amount raised in stamp duty on agricultural land for each of the years 2016 to 2020 and to date in 2021; the applicable rate for each year in tabular form; and if he will make a statement on the matter. [48090/21]
Amharc ar fhreagra206. Deputy Matt Carthy asked the Minister for Finance the amount raised in stamp duty in excess of that raised on the first million euros for each of the years 2016 to 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [48091/21]
Amharc ar fhreagra209. Deputy Matt Carthy asked the Minister for Finance the amount raised in stamp duty on agricultural land by persons aged 35 to 40, 41 to 45, 46 to 50 and 50+ for each of the years 2016 to 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [48094/21]
Amharc ar fhreagraI propose to take Questions Nos. 188, 203, 205, 206 and 209 together.
Regarding Question 48069-21, it is assumed the Deputy is referring to Agricultural Relief claimed in respect of Capital Acquisitions Tax. Information in respect of the number of individuals availing of this relief for all available years is shown at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx. A breakdown of the income tax assessment status or gender of the claimants is not available as this information is not captured in the relevant tax returns.
In respect of PQ 48088/21, I am advised by Revenue that the numbers availing of the young trained farmer Stamp Duty relief and the Exchequer cost for all available years are published on the Revenue website at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx
The information for 2021 will be published during 2022.
Regarding Questions 48090/21 and 48094-21, I am advised by Revenue that the amount of Stamp Duty paid in respect of transfers of agricultural land, for the years 2016 to 2020 and to the end of August 2021, is shown in the table below. It is not possible to provide a breakdown of receipts by the age of the taxpayers as this information is not captured within the Stamp Duty return.
|
Year |
€m |
Non-Residential Rate |
|
2016 |
22.4 |
2% |
|
2017 |
23.9 |
2%* |
|
2018 |
48.5 |
6% |
|
2019 |
56.9 |
6%** |
|
2020 |
66.1 |
7.5% |
|
2021*** |
43.7 |
7.5% |
*6% from 11 October 2017
**7.5% from 09 October 2019
Regarding Question 48091-21, the 2% rate of Stamp Duty on amounts in excess of that raised on the first million euro applies to transfers of residential property only. The amounts raised by the application of the 2% rate (on residential property), for the years 2016 to 2020, and to the end of August 2021, are set out in the table below.
|
Year |
Stamp Duty, excess more than 1 million €m |
|
2016 |
185.7 |
|
2017 |
117.7 |
|
2018 |
328.1 |
|
2019 |
375.8 |
|
2020 |
301.1 |
|
2021 (to end August) |
225.3 |
189. Deputy Matt Carthy asked the Minister for Finance if he has considered resolving an anomaly whereby if a farm is transferred into joint ownership a spouse is required to own and farm the asset for the next ten years before availing of capital gains tax retirement relief. [48070/21]
Amharc ar fhreagraAt the outset, the Deputy should note that this matter was raised during a Finance Bill 2020 committee stage debate. As a result a technical note was prepared and sent to the Committee on Finance, Public Expenditure and Reform, and Taoiseach on 23 December 2020. This note provides a good overview of the issue.
For the purpose of this response you should note that Sections 598 and 599 of the Taxes Consolidation Act 1997 provide relief from capital gains tax on the disposal of a qualifying business or farming assets where the person disposing of the asset(s) is aged 55 or over and both owned and used the assets for the ten years prior to the disposal. For the purposes of the relief, qualifying assets include land and other assets used for farming purposes.
In relation to farming assets, the legislation requires that, in order to qualify for the relief, the individual must own and use the assets for the purposes of farming in the ten-year period ending on the disposal. If the individual does not meet the ten-year requirement as set out in the legislation, both in respect of their ownership of, and use of, these assets, the relief from capital gains tax under section 598 and/or section 599 is not available to that individual.
As explained in the technical note to the Committee on Finance, Public Expenditure and Reform, and Taoiseach, I am of the view that there is no basis for changing the existing position as such an amendment could effectively double the relief available to a couple even in cases where one spouse had never used the asset (e.g. worked on the farm), thus undermining the integrity of the relief. Consequently, I could not support such a change.
190. Deputy Matt Carthy asked the Minister for Finance the number of farmers that availed of the opportunity to step out of income averaging as second time within a five-year period from 2020 to date; the average financial implications arising; the net result to the Exchequer; and if he will make a statement on the matter. [48071/21]
Amharc ar fhreagraI am advised by Revenue that the deadline for filing tax returns in relation to the tax year 2020 is not until later in 2021. When these returns are received and analysed in early 2022, it will then be possible for Revenue to identify taxpayers availing of the temporary (Covid related) second step-out from income averaging in 2020.
191. Deputy Matt Carthy asked the Minister for Finance if he plans to retain consanguinity relief in its current form for the duration of the current Government; and if he will make a statement on the matter. [48072/21]
Amharc ar fhreagraConsanguinity relief provides, under certain conditions, for a 1% rate of stamp duty to be applicable where a transfer of agricultural land (by sale/purchase, exchange or gift) is made to certain close relations, such as a mother to son or uncle to niece. The standard rate of stamp duty applying to the transfer of agricultural land is 7.5%.
In line with Government policy, it is intended to both encourage and facilitate intergenerational farm transfers.
The consanguinity stamp duty relief (as set out in Schedule 1 of the Stamp Duties Consolidation Act 1999) was last extended in section 53 of Finance Act 2020. It is next due to expire at the end of 2023.
It is my view that extending such tax reliefs in three year increments provides an appropriate balance between delivering a degree of medium-term certainty in respect of the availability of a relief for those planning to avail of it, as well as for those operating it, and the need for the relief to be reviewed regularly by my Department (with the assistance of the Department of Agriculture, Food and the Marine). These regular reviews help ensure that the reliefs remain fit-for-purpose, reflect current government policy, continue to be consistent with EU state aid policy, and to allow for other considerations.
On that basis, a decision of the further extension of the consanguinity relief is expected to be taken in advance of Budget 2024/Finance Bill 2023.
192. Deputy Matt Carthy asked the Minister for Finance his proposals with regard to agricultural relief capital acquisition tax; and if he will make a statement on the matter. [48073/21]
Amharc ar fhreagraAs the Deputy may be aware, the Capital Acquisitions Tax (CAT) Agricultural Relief operates by reducing the market value of 'agricultural property' (including farmland, buildings, stock) by 90%, so that gift or inheritance tax is calculated on an amount - known as the 'agricultural value' - which is substantially less than the market value.
To qualify for agricultural relief, 80% of the beneficiary’s assets, after having received the gift/inheritance, must consist of qualifying agricultural assets. The beneficiary must also be an active farmer or lease the land to one. Agricultural Relief has been available for gift and inheritance tax since the introduction of Capital Acquisitions Tax in 1976.
I believe Agricultural Relief is a vital measure to ensure the ongoing viability of family farms that pass from one generation to another and any reduction in scale of relief could have a negative impact on the development and growth of farming businesses. I also believe it is a fair and valuable relief to the beneficiaries. I have no plans to adjust Agricultural Relief at this time.
