Written answers

Tuesday, 20 October 2015

Photo of Tony McLoughlinTony McLoughlin (Sligo-North Leitrim, Fine Gael)
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247. To ask the Minister for Finance if the reduction of the rate of capital gains tax, from 33% to 20%, announced in Budget 2016 will be available to farmers forced to sell their land under compulsory purchase orders; and if he will make a statement on the matter. [36436/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that gains in respect of land acquired by way of a compulsory purchase order are chargeable to capital gains tax (CGT) at the rate of 33%. As the Deputy is aware, I announced in Budget 2016 that I am introducing a revised relief for entrepreneurs whereby a reduced rate of 20% will apply to gains on disposals of assets made on or after 1 January 2016 which have been used for the purposes of a business carried on by an individual up to an overall limit of €1m. Farmers whose land has been compulsorily acquired may qualify for the relief if they meet the conditions of the relief which will be set out in the Finance Bill to be published on 22 October.

Photo of Derek NolanDerek Nolan (Galway West, Labour)
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248. To ask the Minister for Finance if the exemption level for inheritance tax will be applied from the date that the finalising probate is processed, as opposed to the date of the benefactor's death; and if he will make a statement on the matter. [36526/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that there are two important dates that are relevant for the taxation of an inheritance. These dates are used for different purposes and are mutually exclusive. Firstly, the date of death of a disponer is the date by reference to which the Group Thresholds and tax rates are determined. The Group Threshold is the value below which a gift or inheritance is not liable to tax in a given class of relationship such as parent to child. Therefore, whatever thresholds and rates are in force on this date apply for the purpose of taxing the value of an inheritance. These rules are based on statute and are strictly applied.  

Secondly, the date on which probate or administration is granted is generally used as the 'valuation date'. This date has no effect whatever on the applicable Group Thresholds and tax rates. The valuation date is the date on which the market value of the assets/property comprising the inheritance is established. This market value is then compared to the relevant Group Threshold and the tax rate applied as appropriate on any excess of the market value over the threshold. This date also determines when any inheritance tax must be paid and a tax return must be submitted to Revenue.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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249. To ask the Minister for Finance his plans to change the age of the Stamp Duty exemption for young farmers, from 35 years of age to 40 years of age, in line with the recent changes in the Common Agricultural Policy; and if he will make a statement on the matter. [36532/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Currently a young trained farmer is defined as being under 35 at the start of a tax year. The 2013 reform of the CAP introduced an age definition for a young farmer as a farmer under 40 years.

Any moves to bring existing measures into line with this definition will need new EU state aid approval and legislative change.

I have no plans to make any changes in this area at present. However, the matter will be kept under review with appropriate liaison between my officials and officials at the Department of Agriculture, Food and the Marine.

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