Patrick O'Donovan (Limerick, Fine Gael)
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161. To ask the Minister for Finance if he will clarify the situation regarding capital gains tax (details supplied). [25303/13]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that relief under Section 598 of the Taxes Consolidation Act 1997 (“Section 598”), commonly referred to as retirement relief, is available to farmers who satisfy the conditions applicable to that relief. While the relief is commonly referred to as retirement relief it is not, in general, necessary that the farmer disposing of his or her farm actually retire from farming. An exception to this is where the relief is claimed by reference to the Early Retirement from Farming Scheme (“the Scheme”), as a condition of that Scheme is that the farmer permanently retires from farming on a commercial basis. Once a farmer satisfies the conditions of the Scheme (including in particular the permanent retirement from farming) and satisfies the related conditions of Section 598, relief from capital gains tax may be claimed when the land is ultimately disposed of, even though at that time the farmer does not farm the lands (e.g. the lands were let up to the time of disposal in accordance with the terms of the Scheme).

However, if a farmer breaches the conditions of the Scheme at any stage, for example, by not permanently ceasing farming, the Scheme contains provisions with regard to recovery of all benefits obtained under the Scheme. From a capital gains tax viewpoint, if a farmer were to claim Section 598 relief on the basis that he or she satisfied the terms of the Scheme but those terms are not adhered to, then the claim for Section 598 relief would fail - as neither the terms of the Scheme nor the basis on which the relief under Section 598 is claimable would be satisfied.