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

I move amendment No. 17:

In page 68, after line 35, to insert the following:“Amendment of section 542 of Principal Act (time of disposal and acquisition)

37. Section 542 of the Principal Act is amended by inserting the following subsections after subsection (1):

“(1A) Notwithstanding subsection (1)(c), the time of the disposal of land which has been compulsorily acquired shall be the time at which the compensation amount in respect of that compulsory acquisition is received, where that amount is received on or after 1 January 2016.

(1B) Notwithstanding subsection (1)(d), the time of the deemed accrual of a chargeable gain in respect of a disposal of land which has been compulsorily acquired shall be the time at which the compensation amount in respect of that compulsory acquisition is received, where that amount is received on or after 1 January 2016.”.”.

The revised capital gains tax, CGT, relief for entrepreneurs will come into effect in respect of gains made from disposals of chargeable business assets or of a qualifying business on or after 1 January 2016. Business people will qualify for the reduced 20% rate of CGT on such disposals from that date, subject to meeting the various conditions of the relief. Business people, including farmers, are also liable to CGT on any gains made from the disposal of land under compulsory purchase orders where they may be required to sell such business assets used in their qualifying business. It is reasonable to ensure that individuals in this situation, who will have made such compulsory disposals before 1 January 2016 but who will receive compensation payments in respect of the disposal in 2016, are placed in the same position for tax purposes, in so far as qualifying for the reduced 20% rate is concerned, as individuals who make the disposal in 2016. For this reason I propose the amendment to provide that in respect of the compensation payments received on or after 1 January 2016, the date of receipt of the payment will be treated as the date on which the disposal of the land occurred. I commend the amendment to the House.

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