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

I move amendment No. 91:

In page 69, between lines 9 and 10, to insert the following:

“Capital Gains Retirement Relief and Agricultural Relief for farmland with solar panels30. The Principal Act is amended in section 664(1) by substituting the following for the definition of “farm land”:

“ ‘farm land’ means—

(a) land in the State wholly or mainly occupied for the purposes of husbandry and includes a building (other than a building or part of a building used as a dwelling) situated on the land and used for the purposes of farming that land, or

(b) land in the State on which solar panels are installed which is still mainly occupied for the purposes of husbandry and includes a building (other than a building or part of a building used as a dwelling) situated on the land and used for the purposes of farming that land;”.”.

This amendment relates to the use of farmland for solar power generation and the taxation implications of that. It relates to cases in which a farmer leases his land for the purpose of the installation of solar panels. This is more popular than one might think. This week, theIrish Examinerreported that Kerry County Council had received six applications in the past 12 months alone for solar farms, essentially for parts of farms to be used for solar power generation. The particular issue I raise relates to the application of agriculture tax relief, which comes, as the Minister knows, under the long-established provisions of the 90% relief that applies when a qualified farmer inherits a farm. There is a key test to be defined as a farmer, which is that the beneficiary's agricultural property must comprise at least 80% of the gross market value of that person's total property at a particular date.

The issue here is that, for the purposes of establishing whether a beneficiary satisfies the 80% test, Revenue takes the view that land on which solar panels are installed is not agricultural property. Therefore, depending on the amount of an individual's land that is actually occupied by solar panels, the use of agricultural land for a solar farm may result in the beneficiary's failure to meet that 80% test and therefore to qualify for agricultural relief. Mr. Jim Gannon, the CEO of the Sustainable Energy Authority of Ireland, pointed out in comments today that about 9% of our total energy currently comes from renewable sources, which we need to get up to 16% by 2020. Tax practitioners are now advising farmers to be very cautious in making their land available for solar panels because of the taxation implications, namely and principally, the capital acquisitions tax, CAT, implications of the possible non-application of agricultural relief. It is an emerging issue and one which is going to have to be addressed. I look forward to the Minister's comments on it.

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