Paul Kehoe (Wexford, Fine Gael)
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Question 248: To ask the Minister for Finance if a person is liable for full capital gains tax when they compete in the EU early farm retirement scheme having leased their farm to a non-relative family member, lost all entitlements and being prevented from farming in any form, should they decide to sell a building site. [13408/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that, under section 598 of the Taxes Consolidation Act 1997, an individual who is 55 years or over may obtain relief from capital gains tax on the sale of his or her qualifying assets.

In a case where the site being sold is part of a farm that was leased under the 1992 or the 2000 EU early retirement from farming scheme, qualifying assets include land which has been leased under the scheme where the land was, for a period of ten years or more prior to such a lease, owned by the individual and used by him or her for the purposes of farming throughout that period. To qualify, the individual must be at least 55 years of age at the time of the disposal. Full relief is available where the proceeds from the disposal do not exceed €500,000. In such a case, no tax is charged on the gains arising. If the proceeds exceed €500,000, marginal relief may apply. It should be noted that this limit is an aggregate limit, that is, the relief is limited to an aggregate consideration of €500,000 for all disposals of qualifying assets made after the individual has reached 55 years of age.

If the site being sold is not part of a farm that was leased under the early retirement from farming scheme, or if the vendor does not otherwise qualify for the relief, capital gains tax is payable on the chargeable gain. The taxpayer in question should contact the Revenue Commissioners if further details are required.