Michael Noonan (Limerick City, Fine Gael)
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Changes to the carbon tax are a matter for the annual budget/finance bill cycle.  In this context changes to the carbon tax would be for consideration for Budget 2015.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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42. To ask the Minister for Finance the position regarding single farm payment entitlements and land that have been leased under the early retirement scheme and the lessee now wishes to purchase the entitlements before 15 May 2014; if this transaction would be subject to the €37,500 VAT limit; if this sale would be subject to capital gains tax; and if he will make a statement on the matter. [16887/14]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that, in general, if a single payment entitlement is sold without land then VAT will be due at the standard rate of 23% on the sale if the sale proceeds exceed the relevant threshold for registration (currently €37,500 per 12 month period). A farmer who exceeds the threshold by virtue of selling a payment entitlement is obliged to register for VAT but only in respect of that single transaction. Non-VAT-registered farmers who purchase a payment entitlement and suffer VAT are not permitted to register in respect of the single transaction, but will have the normal registration option open to them.

Where a farm business, including payment entitlement, is sold to a person who intends to carry on the farming business, then the sale may be treated for VAT purposes as the transfer of a business or part thereof, provided all the relevant conditions are met. In such circumstances, the sale is deemed not to be a supply for VAT purposes and VAT is not chargeable on the sale.

A single payment entitlement is a chargeable asset for capital gains tax purposes. Accordingly, any chargeable gain arising on the disposal of such entitlements is ordinarily liable to capital gains tax. Where a disposal of a single payment entitlement is made by an individual, the first €1,270 of any gain is exempt from capital gains tax. Where the gain exceeds that amount, capital gains tax will only be charged on the amount in excess of €1,270. The current rate of capital gains tax is 33%.

Section 598 of the Taxes Consolidation Act 1997 provides for what is commonly referred to as retirement relief in respect of a disposal by an individual of land or of an interest in land owned and farmed by that individual for a period of not less than 10 years ending with the disposal. Where any such disposal also includes the disposal of a single payment entitlement at the same time and to the same person it also qualifies for relief from capital gains tax. For capital gains tax purposes, retirement relief is given where the consideration for the disposal of the land together with the payment entitlement does not exceed the following amounts:

- €750,000, in the case of an individual who retires from farming and who is aged 55 years or over but less than 66 years,

- €500,000, in the case of an individual who retires from farming and who is aged 66 years or over,

- €3 million, in the case of an individual who retires from farming, is aged 66 years or over and the disposal is to his or her child (as defined in Section 599(1)).

- in a case where the retiring farmer is aged 55 years or over but less than 66 years and the disposal is to his or her child (as defined in Section 599(1)), there is no upper limit on the amount of consideration that qualifies for relief.

The capital gains tax retirement relief also applies to an individual who avails of the Scheme of Early Retirement from Farming (Early Retirement Scheme (ERS3) 2007) implemented by the Department of Agriculture, Food and the Marine and who satisfies the above conditions.

A single payment entitlement that is disposed of without also disposing of the land at the same time and to the same person does not qualify for retirement relief.