Written answers

Tuesday, 24 May 2016

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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104. To ask the Minister for Finance if the Revenue Commissioners provide an exemption to persons letting land for farming purposes when they have leased long-term for the planting of Christmas trees, for solar panels and for permanent afforestation; and if he will make a statement on the matter. [11397/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Section 664 of the Taxes Consolidation Act 1997 (TCA) provides for a tax exemption in respect of income received by persons from certain long term leases of farm land. The purpose of the relief is to encourage more landowners to lease out land on a long term basis to active farmers thereby encouraging more productive use of the land. The farm land must be used by the lessee for the purpose of carrying on a trade of farming or market gardening (the occupation of land as a nursery or garden for the purpose of growing produce for sale.)

Land in use for afforestation is not market garden land and is therefore not considered to be occupied for the purpose of husbandry. Similarly, land in use for the planting and harvesting of Christmas trees is treated as woodland for tax purposes as opposed to farm land. Therefore the exemption will not be available in respect of long term leases of land for afforestation or Christmas tree production. However, under Section 232 of the TCA, a separate tax exemption is available in respect of profits or gains arising from the occupation of woodlands which are managed on a commercial basis.

In relation to land leased to a company for solar energy generation, in general, such a company would not be considered to be carrying on a trade of farming and therefore would not be a qualifying lessee for the purpose of the exemption. A recent eBrief on this issue published by the Revenue Commissioners provides more information, and can be accessed at their website at  .

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