Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

This section will make various amendments to the agricultural relief and business relief provisions of the Capital Acquisitions Tax Consolidation Act 2003. Agricultural relief and business relief are available in respect of gifts and inheritances of agricultural property and relevant business property, subject to certain conditions being met. Where these reliefs apply, they operate by reducing the value of the agricultural property or relevant business property by 90%. Capital acquisitions tax is then payable on the reduced amount after allowing for any unused group threshold.

To ensure these reliefs are appropriately targeted at genuine cases of farm and business succession, the legislation includes provision for the relief granted to be clawed back where certain conditions are not met for a specific period of time after the relief has been given. Revenue recently undertook a review of these clawback provisions and some inconsistencies and anomalies in the legislation were identified during that review. These can be summarised as follows: the clawback period for both reliefs can sometimes commence before a person has actually obtained the benefit of the agricultural property or relevant business property concerned; the events that can trigger a clawback of agricultural relief are broader in scope than the events that can trigger a clawback of business relief; there is a formula for calculating agricultural relief and it is not currently clear how this applies when agricultural property is gifted; and, where relief is to be clawed back, it is not stated in the legislation exactly what the beneficiary is required to do when paying the outstanding tax to Revenue. The amendments proposed in this section are intended to address these issues, which are broadly technical in nature.