James Browne (Wexford, Fianna Fail)
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143. To ask the Minister for Finance the availability of agricultural relief from capital acquisitions tax, where the farming land that is the subject of the relief has an already commissioned solar farm or is wholly or partially the subject of an unexercised option in favour of a solar farm developer or the subject of a burden in the Land Registry prohibiting the alienation or transfer of the landholding without the consent of a solar farm developer; and if he will make a statement on the matter. [17073/16]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that gifts and inheritances of agricultural property, including land, qualify for relief (known as 'agricultural relief') from the payment of Capital Acquisitions Tax (CAT) once certain conditions are satisfied. Section 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for 'agricultural relief'. The relief takes the form of a 90% reduction in the taxable market value of the gifted or inherited agricultural property.

The person taking the gift or inheritance (the 'beneficiary') of the agricultural property must qualify as a 'farmer' for the purpose of section 89 CATCA 2003. This means that a beneficiary's agricultural property must comprise at least 80% by gross market value of the beneficiary's total property at a particular date. The Revenue Commissioners take the view that land on which solar panels are installed is not agricultural property for the purpose of establishing whether or not a beneficiary satisfies this '80%' test. Thus, depending on the amount of an individual's land that is actually occupied by solar panels (and not merely subject to an option over the land), the use of agricultural land for a solar farm may result in a beneficiary's failure to satisfy the '80%' test and to qualify for agricultural relief. 

A condition for agricultural relief that applies in relation to gifts and inheritances taken on or after 1 January 2015 is that a beneficiary, or a lessee where the beneficiary leases the agricultural land, must actually farm the land for a period of at least 6 years after taking the gift or inheritance. It is unlikely that the ability to farm the land would be affected by the granting of an option over the land to a solar farm developer or the registration of a burden over the land with the Land Registry. However, the ability to farm the land would be affected where the option is exercised by the solar farm developer and solar panels are actually installed. As it would not generally be possible to farm any part of the land occupied by a solar farm, the change in the use of land from farming to the generation of solar energy within the required 6-year period would result in a withdrawal of some, or all, of any agricultural relief that had been granted, depending on how much of the land is diverted to this alternative use.