Paul Kehoe (Wexford, Fine Gael)
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Question 172: To ask the Minister for Finance the criteria and implications for a land owner who wishes to sign his holding over to persons (details supplied); and if he will make a statement on the matter. [7814/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that the proposed transfer by a landowner, in the circumstances outlined, is treated as a disposal for capital gains tax purposes. In computing the gain the deemed sale price is the market value of the property at the date of the transfer. Relief from capital gains tax is available where an individual, aged 55 years or over, disposes of all or part of his/her "qualifying assets". For the purposes of this relief "qualifying assets" include assets which have been owned by the individual for a period of not less than 10 years ending on the date of the disposal and have been used for the purposes of farming or a trade by the individual throughout the 10-year period ending with the disposal. If the transfer is from parent to child, relief is withdrawn if the child disposes of the assets within 6 years of the date of transfer. The withdrawn relief is chargeable on the child.

For the purpose of both Gift and Inheritance Tax (Capital Acquisitions Tax), the relationship between the person who provides the gift or inheritance (the disponer) and the person who receives the gift or inheritance (the beneficiary), determines the maximum tax-free threshold- known as the "Group Threshold". The threshold applying to a gift or inheritance received by a child from his/her parents is the Group A threshold and for 2007 this is €496,824. Any other gifts/inheritances that might have been received by the beneficiary from within the same Group A threshold (i.e. from parents) since 5 December 1991 will also be taken into account when applying the threshold for the purpose of calculating the gift/inheritance tax. Each child is separately entitled to its own Group A tax-free threshold.

If a gift or inheritance consists of agricultural lands, the market value of the agricultural lands may be reduced by 90% provided certain conditions are met. The conditions attaching to the relief are that the land is taken by a "farmer", who is defined in the legislation as an individual in respect of whom not less that 80 per cent of his or her assets, after taking the gift or inheritance, consist of agricultural property and also that the land is not disposed of for six years after the date of the receipt of the gift or inheritance. A gift of land attracts a stamp duty liability based on the market value of the land transferred. The rates of stamp duty which apply are set out in the Table that follows this reply. The stamp duty payable is reduced by 50% in the case of a gift from a parent to a child. There is an exemption from stamp duty in the case of the transfer of land to a person who is under 35 years of age, who is the holder of specified educational qualifications and who complies with certain other conditions. However, having regard to the details supplied by the Deputy, this exemption would not apply to the transfer in this case.