Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I want to first set out the current position on capital acquisitions tax, CAT, agricultural relief. The purpose of agricultural relief is to encourage the productive use of agricultural land and to prevent the sale or break-up of farms to pay a CAT liability.

Agricultural relief operates by allowing the value of agricultural assets received to be reduced by 90% of its value for the calculation of the CAT liability. This is a key relief in ensuring the inter-generational transfer of farm assets and plays an important role in farm succession planning. To qualify for the relief, certain conditions must be met. The first condition is that, following the inheritance or gift, at least 80% of the property owned by the farmer consists of agricultural property. A second condition, known as the active farmer test, is in place to ensure that the farmland will continue to be actively farmed following the inheritance or gift.

Agricultural land owned by the farmer and located either inside or outside the State can be used to determine qualification for this relief. Equally, the agricultural land which is inherited or gifted to the farmer, on which CAT is relieved, can be inside or outside the State in any part of the European Union.

I want to reassure the Deputy that the possible impact of Brexit on this specific relief is something of which I and my officials are fully aware.

An agricultural relief for CAT has been in place since CAT was first introduced and I am conscious of the importance of this relief to the farming community. The Deputy will appreciate, however, that Brexit negotiations are still ongoing and there is a very wide array of issues that we will have to deal with, particularly in our tax code. At this point, it would be inappropriate and premature for me to comment on the future of this relief until a clearer picture emerges from the Brexit negotiations.

I hope the Deputies will appreciate that there is sensitivity regarding elements of our tax code that prevent me from giving a further commitment on that point now. However, I want to emphasise the importance of seeing a successful outcome from the negotiations centring on Brexit. I reiterate that given the implications of this particular relief, it is something of which I am very much aware. It depends on the outcome of Brexit negotiations that will take some time to complete.

Before I comment any further on this relief, there is a broader set of principles on which we will need to get agreement. I reiterate for Deputy McGrath's information that I am aware of the importance of this particular relief. The safest thing to do would be to allow us continue with work that we have on the outcome of Brexit. Much of the work that will need to take place on this is still some way down the road. We have a set of other issues that we are trying to get resolved. The wisest thing for us to do will be to look at this relief at a later point in the context of a set of other decisions rather than me committing to a report on it now that will only restate what I have just said to the Deputy. For that reason, I would ask the Deputy to consider withdrawing this amendment in light of the fact that I recognise the importance of this issue, but there are many other issues we need to get resolved first.