Dáil Éireann Debate, Wednesday - 6 March 2024
66. Deputy Michael Fitzmaurice asked the Minister for Finance if a person is a resident in the USA and was Irish born with a PPS number, if that person enters a five-year lease to lease owned lands, if this is tax free; if not, what is the terms and criteria; and if he will make a statement on the matter. [11046/24]
Amharc ar fhreagraI am advised by Revenue that rental income from Irish-situate property is normally taxable under what is known as Case V of Schedule D of the Taxes Consolidation Act 1997 (TCA) and that Ireland retains taxing rights on income from “immovable property” located in the State under Article 6 of the Double Taxation Agreement between Ireland and the United States of America. Therefore, rental income arising to a US resident from land situated in Ireland is subject to tax in Ireland.
Where land that is the subject of a lease is farm land, section 664 of the TCA may provide an income tax relief where certain conditions are satisfied. Subject to an upper limit, individuals who qualify for the relief are entitled to take a deduction in determining their total income for income tax purposes.
The lease must be a qualifying lease, that is, a lease of farm land which —
• is in writing or evidenced in writing,
• is for a definite term of five years or more, and
• is made on an arm’s length basis between one or more qualifying lessors and one or more qualifying lessees.
In respect of farm land which has been purchased by an individual pursuant to a contract entered into on or after 1 January 2024 for a consideration equal to the market value of the land at the date of the purchase, an individual must hold the farm land concerned for at least seven years before leasing the farm land under a qualifying lease. Where the land has been acquired otherwise than by purchase, this restriction may not apply.
I am advised by Revenue that there is no requirement under section 664 TCA for an individual landowner to be resident in Ireland to avail of the income tax exemption, once the various conditions of the measure are met.
Information on the relief available under section 664 TCA in respect of the leasing of farm land is contained in Revenue’s published Tax and Duty Manual on ‘Relief for certain income from leasing of farm land (Section 664)’, which can be accessed on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-23/23-01-23.pdf.
