Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 83:

In page 87, to delete lines 37 to 41, and in page 88, to delete lines 1 to 9 and substitute the following:“(i) is the holder of any of the qualifications set out in Schedule 2, 2A or 2B to the Stamp Duties Consolidation Act 1999, or who achieves
such a qualification within a period of 4 years commencing on the date of the gift or inheritance, and who for a period of not less than 6 years commencing on the valuation date of the gift or inheritance farms agricultural property (including the agricultural property comprised in the gift or inheritance) on a commercial basis and with a view to the realisation of profits from that agricultural property,
(ii) for a period of not less than 6 years commencing on the valuation date of the gift or inheritance spends not less than 50 per cent of that individual’s normal working time farming agricultural property (including the agricultural property comprised in the gift or inheritance) on a commercial basis and with a view to the realisation of profits from that agricultural property, or
(iii) leases the whole or substantially the whole of the agricultural property, comprised in the gift or inheritance for a period of not less than 6 years commencing on the valuation date of the gift or inheritance, to an individual who satisfies the conditions in paragraph (i) or (ii).”,”.

These Committee Stage amendments all relate to section 89 of the Capital Acquisitions Tax Consolidation Act 2003, which deals with agricultural relief. Capital acquisitions tax relief is available in respect of gifts and inheritances of agricultural property, including land, subject to certain conditions. At present, individuals who are farmers as defined in the section are entitled to agricultural relief. The definition requires that a farmer’s agricultural property must comprise 80% by value of the farmer’s total property.
The amendments to the agricultural relief provisions contained in the Bill, as published, provide for a further requirement under the definition to ensure that agricultural relief is more effectively targeted at individuals who inherit or who are gifted agricultural property and who actively farm it themselves or who lease it on a long-term basis to active farmers. To qualify for agricultural relief, the beneficiary or lessee must spend not less than 50% of his or her normal working time farming agricultural property, including the agricultural property comprised in the gift or inheritance, on a commercial basis and with a view to the realisation of profits from that agricultural property. The purpose of these amendments is to ensure productive use of agricultural property.
Amendment No. 83 further extends agricultural relief to any beneficiary of a gift or inheritance of agricultural property if that beneficiary is the holder of any of the qualifications for applying for relief from stamp duty in respect of transfers to young trained farmers - set out in Schedule 2, 2A or 2B to the Stamp Duties Consolidation Act 1999 - or who achieves such a qualification within four years from the date of the gift or inheritance, and who, for a period of not less than six years, farms the agricultural property on a commercial basis and with a view to the realisation of profits from that agricultural property.
This amendment is designed to ensure that beneficiaries of agricultural property who hold qualifications in agriculture and whoare productive farmers but who are not in a position to spend at least 50% of their normal working time farming the agricultural property can also avail of the relief. Following the passing of the Bill, the Revenue Commissioners will publish a note for guidance on the practical operation of the provisions. This note will specify, among other things, that Revenue will accept that normal working time, including on-farm and off-farm working time, approximates to 40 hours per week. This will enable farmers with off-farm employment to qualify for the relief provided they spend a minimum average of 20 hours working per week on the farm. Where anyone can show that their normal working time is somewhat less than 40 hours a week, then the 50% requirement will be applied to the actual hours worked, subject to the overriding requirement that the farm be farmed on a commercial basis and with a view to the realisation of profits.
My second amendment provides for the claw-back of the relief if the additional conditions for the attainment of the agricultural qualifications by the beneficiary or use of the agricultural property by the beneficiary or lessee are not satisfied. Deputy Doherty’s proposed amendment to the relief involves the substitution of a specific period of a 35-hour working week in the section. Many farmers, in addition to carrying on farming on a commercial basis and with a view to the realisation of profit, have off-farm employment to supplement their farming income. Introducing a specific hourly requirement in the legislation, as the Deputy’s amendment proposes, allows no element of flexibility for genuine situations where that 35-hour period might not be satisfied. I consider that the Government's first amendment, together with the guidance note that the Revenue Commissioners will issue on how what is termed "normal working time" will be applied in practice, is a more flexible approach and for this reason I cannot accept the Deputy’s amendment. It goes over the same ground again but is simply adding a further definition regarding "active farmer" in case there is any doubt that the reliefs will apply to any person who qualifies under any of the four categories.