Paul Kehoe (Wexford, Fine Gael)
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Question 144: To ask the Minister for Finance the tax a farmer (details supplied) has to pay in particular circumstances; and if he will make a statement on the matter. [26122/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the proposed transfer by a farmer, in the circumstances outlined in the Deputy's query, is treated as a disposal for Capital Gains Tax (CGT) purposes. CGT is applied to the deemed sale price of property which is being disposed and, in this case, the aggregate market value of the land and milk quota at the date of the transfer is considered to be the deemed sale price.

Relief from CGT is available where an individual aged 55 years or over disposes of all or part of his/her "qualifying assets" In this case, qualifying assets include assets which have been owned by the individual for a period of not less than 10 years at the date of the disposal, where these assets have been used for the purposes of farming by the individual throughout that 10-year period.

Where the transfer is from parent to child, relief is withdrawn where the child disposes of the assets within 6 years of the date of transfer. The withdrawn relief is chargeable on the child.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 which is known as the Group Threshold".

The Group threshold applying to a gift or inheritance received by a child from his/her parents is the Group A threshold and for 2008 this is €521,208. 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.

Where a gift or inheritance consists of agricultural lands, the market value of the agricultural lands (taking into account the value of the milk quota being transferred with the agricultural lands) may be reduced by 90% provided certain conditions are met. These conditions include a requirement 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. It is also a requirement that the land is not disposed of for 6 years after the date of the receipt of the gift or inheritance.

In general terms, a gift of land attracts a Stamp Duty liability based on the market value of the land transferred. The value of the milk quota attached to the land is included in the market value of the land. The non-residential property rates of Stamp Duty apply to gifts of this nature but any 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 provided that the person holds specified educational qualifications and they comply 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.

Willie Penrose (Longford-Westmeath, Labour)
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Question 145: To ask the Minister for Finance if he will confirm that not for profit community based child care organisations are organised as limited companies, are not rateable and while they may be entered in the valuation list by the valuation office, that the relevant local authority does not have a right to levy rates on such childcare facilities; and if he will make a statement on the matter. [26132/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Generally, all buildings for whatever purpose, are rateable under the provisions of the Valuation Act, 2001, except for certain categories of buildings, provided for as non-rateable under Schedule 4 of the Act.

The categories of buildings provided for as non-rateable under Schedule 4 of the Act would principally include those used for public worship, education and institutions of Art and Science. While Schedule 4 (relevant property not rateable) does not specifically provide for the exemption of community-based childcare organisations, there may be instances where such enterprises which are operated on a not-for-profit basis are deemed not to be rateable if conducted in a community hall. The activities of a community hall are exempt from rates under Schedule 4, section 15 of the Act, the exception being the premises of a club registered under the Registration of Clubs Act, 1904. Within the context of the legislation, a community hall means a hall or similar building, which must not be used primarily for profit or gain and is occupied for use by the inhabitants of the locality generally for purposes that are recreational or otherwise of a social nature. Therefore, if a community childcare facility operates in a community hall as so defined, it will be treated as non-rateable.

Similarly, any building used by a community childcare organisation, whether incorporated as a limited company or not, which operates on a non-profit basis as a registered charitable organisation may be deemed to be exempt depending on the terms and conditions of the organisation's Memorandum and Articles of Association. The exemption in such an instance is provided for under Schedule 4, section 16 (a) of the Act.

The local authority may levy rates on all rateable properties entered in the valuation list in accordance with rating legislation, but does not have authority to levy rates on the exempt categories of property provided for in Schedule 4, including property as defined by sections 15 and 16 (a) of the Valuation Act, 2001.