Dáil Éireann Debate, Tuesday - 13 December 2022
251. Deputy Jim O'Callaghan asked the Minister for Finance if he will consider extending tax relief for relevant donations for the purchase of land for community and-or recreation facilities for community groups involved in activities other than sports, for example, allotments, community gardens and men's and women's sheds; and if he will make a statement on the matter. [62151/22]
Amharc ar fhreagra252. Deputy Jim O'Callaghan asked the Minister for Finance if there are incentives for landowners to lease their land for allotments, community gardens and men's and women's sheds; if not, if he has plans to introduce such measures; and if he will make a statement on the matter. [62152/22]
Amharc ar fhreagraI propose to take Questions Nos. 251 and 252 together.
In relation to donations, I assume that the Deputy has in mind a “relevant donation” in the context of the Charitable Donations Scheme, provided for in section 848A and Schedule 26A Taxes Consolidation Act 1997 (TCA).
I am advised by Revenue that a relevant donation is a donation with a minimum value of €250 in money or “designated securities”, meaning shares and debentures of a kind quoted on a recognised stock exchange, which is made to an “approved body”, which is an “eligible charity” or another body (including various educational bodies) specified in Part 1 of Schedule 26A TCA.
To be an “eligible charity”, the charity must apply to Revenue for authorisation and meet the conditions laid down in Part 3 of Schedule 26A. It should be noted that, in accordance with Part 3, a body must have been in existence for at least two years before it can qualify for authorisation.
If a community group as mentioned by the Deputy was an “approved body” for the purposes of the Charitable Donations Scheme, a donation to that group would qualify for tax relief. To become an “approved body”, a group would have to apply to the Charities Regulatory Authority to become a charity, and then apply to Revenue to participate in the Charitable Donations Scheme.
In relation to leases, income from the letting of property in the State, including land, is taxable under Case V of Schedule D. An income tax exemption is available for the leasing of farm land under section 664 Taxes Consolidation Act 1997 (TCA). However, in order for that exemption to apply, farm land must be let by a qualifying lessor under a qualifying lease to a qualifying lessee.
Farm land is defined for the purposes of the relief and is limited to land and buildings (excluding dwellings) situated in the State that is wholly or mainly occupied for the purposes of husbandry. In this context husbandry may be taken as including normal farming, market gardening, horse breeding, and any other form of husbandry which involves the use of the land or its produce. The definition of “farm land” does not extend to community gardens or similar. In addition, a qualifying lessee must be engaged in the trade of farming. For these reasons, section 664 TCA would not apply to the leasing of land for the purposes of allotments, community gardens or similar uses.
I am advised by Revenue that there is no specific relief or exemption which applies to the leasing of land for the purposes of allotments, community gardens or similar uses.
As the Deputy will appreciate, decisions regarding tax incentives and reliefs are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. The guidelines make clear that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures, where a tax-based incentive is more efficient than a direct expenditure intervention.
Tax reliefs, no matter how worthwhile in themselves, may serve to narrow the tax base and can make general reform of the tax system that much more difficult.
There are no plans at present to introduce tax relief along the lines outlined by the Deputy.
