Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I move amendment No. 71:

In page 61, to delete lines 7 to 28 and substitute the following:“41. (1) Section 598 of the Principal Act is amended in subsection (1)(a), in the definition of “qualifying assets”, by substituting the following for paragraph (v):

“(v) land which has been let by the individual at any time in the period of 15 years ending with the disposal where—

(I) immediately before the time the land was first let in that period of 15 years, the land was owned by the individual and used for the purposes of farming carried on by the individual for a period of not less than 10 years ending at that time, and
(II) the disposal is—

(A) to a child (within the meaning of section 599) of the individual, or
(B) to an individual, other than a child referred to in clause (A), provided the land was let to a person for the purposes of farming during the period of 15 years referred to in subparagraph (I) and each letting of the land was for a period of not less than 5 consecutive years;”.”.

This amendment relates to section 41. That section amends section 598 of the Taxes Consolidation Act 1997 which grants relief in respect of a disposal of business or agricultural assets which have been owned and used by the individual disposing of those assets for at least ten years prior to the disposal.

The relief also applies, subject to certain conditions, to land which has been farmed for the required minimum ten-year period and is then let. Section 41 extends the relief to a disposal of farm land which has been farmed for the required minimum ten-year period, is let for a period or periods of up to 15 years, with each letting being for a minimum period of five consecutive years, and is then disposed of to a person other than a child of the person disposing of the land. The purpose of the extension is to encourage older farmers who have no children to lease their farms on a long-term basis.

Section 41 properly confirmed the application of the lower limits of the relief to the consideration received on such disposals when made outside the family. In this connection, a limit of €750,000 applies where such disposals are made when the disponer is aged between 55 and 66, while a limit of €500,000 applies from 1 January 2014 where the disponer is aged 66 or over. In doing so, however, the wording of the amendment also imposed the same lower limits on the current relief for disposals of land which is let and subsequently disposed of to a child. This relief has been in place since 2007. It has been suggested the more generous levels of relief which apply to disposals to a child within the meaning of section 599 of the Taxes Consolidation Act 1997, and which, up to now, have applied to such disposals of land which has been let, should not be restricted. This would have the effect of reducing the attractiveness of long-term letting in such situations. Currently, there is no upper limit on the relief available where the farmer aged between 55 and 66 disposes of qualifying land to a child within the meaning of section 599 of the Taxes Consolidation Act 1997. Where the farmer is aged 66 or over, a limit of €3 million will apply to such disposals on or after 1 January 2014.

This amendment ensures where land which has been farmed is let and subsequently disposed of to a child, the higher levels of relief available under section 599 of the Taxes Consolidation Act 1997 will apply, thus restoring the position that has applied since 2007.

I recommend the amendment to the select sub-committee.