Mattie McGrath (Tipperary South, Independent)
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267. To ask the Minister for Agriculture, Food and the Marine the measures his Department is taking to counteract the disproportionate effect that current inheritance tax provisions are having on small holders of agricultural land; and if he will make a statement on the matter. [43117/14]

Simon Coveney (Cork South Central, Fine Gael)
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Taxation policy is primarily a matter for the Minister for Finance. However I have on-going contact with Minister Noonan to ensure that tax policy reflects the Government’s commitment to agriculture. In this regard I am pleased that the Minister and I could facilitate the Agri-taxation Review, which was published as part Budget 2015. It gave us a unique opportunity to examine a critical element of Government support to the agriculture sector in the context of the strategy of expansion and increasing exports under Food Harvest 2020. The Review provides a strong evidence base for continued assistance to the primary sector through taxation measures and it is a clear strategy with specific policy objectives for the future. The Government’s commitment to agriculture is evidenced by the immediate implementation of the majority of the Report’s recommendations in Budget 2015, including 12 new measures, which form part of a strategic policy response to the opportunities and challenges ahead.

One of the taxation policy objectives identified by the Review is to assist succession. The age profile of Irish farmers is increasing and it is recognised that there are many social and economic reasons why succession management is a challenge for farmers. Assisting succession and the transfer of farms has been a central part of the Government’s agri-taxation policy and Budget 2015 included a number of measures to maintain and strengthen that support, specifically:

- The retention and targeting of Agricultural Relief from Capital Acquisitions Tax (CAT) to active farmers or to those who lease out land long-term;

- The retention and enhancement of Retirement Relief from Capital Gains Tax, including two new measures:

- The extension of the eligible letting period of a qualifying asset to 25 years;

- For transfers other than to a child under Retirement Relief, as a once-off measure until the end of 2016, the inclusion of conacre lettings as eligible. I believe that this measure to allow famers who have been engaged in conacre to avail of Retirement Relief if they transfer or move to long-term leasing before the end of 2016 is significant, and will give exit options to a large cohort of farmers.

- The retention of the current stamp duty exemptions on transfers of land, including the extension of Stamp Duty Consanguinity Relief, i.e. relief to related persons, on non-residential transfers to the end of 2017.

The new measures will be implemented by way of the Finance Bill, which was published recently. The Bill does not make any reference to farm size but currently makes reference to individuals being eligible if, “for a period of not less than 6 years commencing on the valuation date of the gift or inheritance spends not less than 50 per cent of that individual’s normal working time farming agricultural property (including the agricultural property comprised in the gift or inheritance) on a commercial basis and with a view to the realisation of profits from that agricultural property”. Alternatively, the land owner may lease out the land long-term (at least 6 years) and still benefit from the Relief.

The Minister and I are working closely to ensure that the legislation will cover as many active farmers as possible.