Patrick O'Donovan (Limerick, Fine Gael)
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15. To ask the Minister for Finance if a person were to sell two parcels of land to buy one parcel of land would they qualify for land consolidation; and if he will make a statement on the matter. [43888/13]

Michael Noonan (Limerick City, Fine Gael)
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As I pointed out in previous replies to PQs tabled by the Deputy in June of this year and earlier this month, I made provision in Budget 2013 for the following measure designed to assist farmers with consolidation of farm land. This measure followed on from measures in the previous year’s Budget which also supported farm expansion and the transfer of land. Section 48 of Finance Act 2013 provides for relief from capital gains tax on disposals of farm land for farm restructuring, subject to a Commencement Order, which I made on 6 June 2013. The terms of the relief are set out in Section 604B, Taxes Consolidation Act 1997.

The relief applies to a sale, purchase or exchange of agricultural land in the period from 1 January 2013 to 31 December 2015 where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes. The initial sale or purchase, or the exchange, must occur in the relevant period and the subsequent sale or purchase must occur within 24 months of that sale or purchase.

Full relief from capital gains tax will be given where the consideration for the purchase or the exchange is equal to or exceeds the consideration for the sale or the other land that is exchanged. Where the consideration for the purchase or the exchange is less than the consideration for the land that is sold or the other land that is exchanged, relief will be given in the same proportion that the consideration for the land that is purchased or exchanged bears to the consideration for the land that is sold or the other land that is exchanged.

Provision is made for the clawback of the relief where qualifying land in respect of which relief has been given is disposed of within 5 years of the date of the purchase or exchange of that land. A clawback does not apply where the disposal arises under a compulsory purchase order.

A prerequisite to any disposal and acquisition of farm land qualifying for this relief is that an application for a farm restructuring certificate is made to Teagasc and that Teagasc grants such a certificate (that has not been withdrawn). Guidelines relating to the application for, and the issue of, a Farm Restructuring Certificate are available on the Department of Agriculture, Food and the Marine’s website.

Based on the limited facts presented, it is not possible to say definitively whether all conditions governing the relief are satisfied – in particular:

- Whether the lands are qualifying lands

- Whether or not the sales are as a result of a compulsory purchase order

- Whether the full proceeds of the sales are invested in the purchase of the new land

- Whether the person in question is an individual who spends not less than 50% of his or her normal working time farming.