Tax Code

Dáil Éireann Debate, Thursday - 5 October 2023

Thursday, 5 October 2023

Questions (206)

Éamon Ó Cuív

Question:

206. Deputy Éamon Ó Cuív asked the Minister for Finance whether he intends changing the rules that to qualify for agricultural relief for capital acquisitions tax that the farm must represent 80% of the recipient of lands assets, in view of the fact that this rule mitigates against farmers on smaller holdings or holdings on poorer land particularly in the west of Ireland; and if he will make a statement on the matter. [43330/23]

Written answers

Minister for Finance

As the deputy is aware, agricultural relief allows the value of agricultural assets gifted or inherited (including farmland, buildings, stock) to be reduced by 90% of their value for the calculation of a Capital Acquisition Tax (CAT) liability. To be eligible for the relief, at least 80% of the gross market value of the property to which a person is beneficially entitled must comprise agricultural property. It should also be noted that a beneficiary may qualify for agricultural relief on non-agricultural property (such as cash) where a gift or inheritance is made subject to the condition that it be invested in agricultural property and that condition is satisfied within 2 years after the date of the gift or inheritance.

This is a valuable relief which supports the inter-generational transfer of family-farms. Therefore, a fundamental objective of this relief is that it is availed of by genuine, and active farmers, and that it relates to agricultural land which is being actively farmed.

The deputy should also note, that the Commission on Taxation and Welfare’s 2022 report recommend that the level of Agricultural relief be reduced, and that the qualifying conditions for this relief be amended to incentivise, and ensure active participation in the farm by the recipient.

With respect to the query on whether there are plans to reform the relief, the options available for the operation of agricultural relief are kept under review by my Department, and must be balanced against competing demands and as part of the annual Budget and Finance Bill process.