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

Deputy McGrath’s amendment raises the issue of the tax treatment of the installation of solar panels on farmland. I will speak first to the detail of the proposed amendment and then to the wider issue. Deputy McGrath proposes changing the definition of “farm land” in section 664 of the Taxes Consolidation Act 1997. While his amendment as drafted refers to reliefs from capital gains tax and capital acquisitions tax, the amendment itself affects only a relief for certain income from the leasing of farm land. As such, the amendment is not likely to achieve the objective which I think Deputy McGrath had hoped for in terms of the treatment of the capital gains tax and capital acquisitions tax of solar panel installations on farmland.

The issue of how the installation of solar panels on farmland affects entitlement to various payments and reliefs from taxation has been raised with both my Department and the Department of Agriculture, Food and the Marine in recent times. Various interconnected issues are at play and all of these policy areas need to be considered in a systematic and coherent manner rather than being considered in isolation. The Government response to such policy issues needs to be consistent and complementary.

From a tax policy perspective it is important to ensure reliefs from taxation are implemented only after proper consideration and where their effect justifies any revenue forgone. Therefore, I intend that these various issues should be considered in a unified manner in co-operation with interested parties over the coming months with a view to changes, if any, being made next year. Given that the proposed amendment is not likely to achieve what I consider was intended by the Deputy and that there are wider policy issues to be considered, I believe this to be a more effective way in which to approach the matter.

For this reason, I do not propose to accept the amendment. However, I accept that this is a genuine issue and may be an issue of greater magnitude in a year or two or three years than it is now, and I am prepared to work with the Deputy to establish the full facts and come up with a solution in advance of next year's finance Bill.

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