Written answers

Tuesday, 15 April 2014

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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197. To ask the Minister for Finance his views on correspondence (details supplied) regarding capital gains tax; and if he will make a statement on the matter. [17775/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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It would appear that the net point being suggested in the correspondence is that capital gains tax relief be introduced for farmers in respect of the sale by them of certain shares in a food company, where the proceeds of sale are used to make capital investments in their farms.

The current rate of capital gains tax was set in Budget 2013 as part of an overall budgetary strategy to generate necessary additional tax revenue. The taxation of capital is preferable from the point of view of its impact on the economy to an increase in employment taxes such as income tax.

Farmers who sell shares in order to make capital investments in their farms are no different to any other taxpayers who may decide to sell shares or other assets.  It is not, therefore, appropriate or justifiable to single out farmers for special treatment over and above other taxpayers. It is important to bear in mind that it is only an actual chargeable gain that is subject to capital gains tax, not the entire consideration t that is derived from a sale of shares. In addition, a farmer can sell shares and make a gain of €1,270 each year without incurring any capital gains tax. (€1,270 is the annual capital gains tax exemption for individuals). 

However, matters to do with capital gains tax and farmers are likely to feature in the Agri-taxation review which I announced in the budget and which is currently underway.

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