Seán Fleming (Laois, Fianna Fail)
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152. To ask the Minister for Finance if capital gains tax is payable on the surplus compared with the original cost of land that would have been purchased in 1989 in circumstances (details supplied); the rate of capital gains tax that would be payable for such a transaction in 2017; if relief is available; and if he will make a statement on the matter. [18177/17]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by Revenue that capital gains tax (CGT) is chargeable on the increase in the value of an asset from the time it was acquired to the time of its disposal. Costs relating to the purchase and disposal of an asset are allowed in calculating the amount of CGT due. In addition, indexation relief is available up to and including the year 2002. This relief ensures that gains that relate to inflation up to the end of 2002 are not charged to CGT.

CGT is chargeable in the situation outlined where individuals sell a portion of their farm to build a family home for themselves. The first €1,270 of gains made by an individual in a tax year is exempt from CGT. The rate of CGT is currently 33%.

There is insufficient information provided in order to give a view as to whether a relief may be available. However, depending on the circumstances of the individuals concerned, a relief known as CGT retirement relief may apply to them. This relief applies where individuals owned and used land for farming purposes for a minimum period of 10 years up to the time that the land is sold. In certain situations, land which was let can qualify for relief provided that, immediately before the land was first let, it was owned and used for farming purposes by the individuals selling the land. Where the individual disposing of the land is aged between 55 and 65 and the disposal is to a person other than his or her child, full relief from CGT applies where the market value of the land does not exceed €750,000. In the case of individuals aged 66 or over, the threshold is reduced to €500,000. Marginal relief may apply where the market value of the land does not greatly exceed either €500,000 or €750,000, as the case may be.

Where the individual is aged between 55 and 65 and the disposal is to a child of that individual, full relief from CGT applies. Where the individual is aged 66 or over, relief is capped at €3m where the market value of the land disposed of exceeds that amount.