Written answers

Thursday, 29 November 2018

Department of Foreign Affairs and Trade

EU Regulations

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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69. To ask the Minister for Finance the way in which the €70,000 limit is calculated with regard to section 21(c)(iii) of the Finance Bill 2018 if a young farmer inherits a family farm worth €1 million; if the relief going towards the €70,000 limit would be €10,000 (1%), €60,000 (6%), or €50,000 (the difference between the two); if any part of a subsequent purchase of land charged at 6% stamp duty would count towards the €70,000; and if he will make a statement on the matter. [49967/18]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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70. To ask the Minister for Finance when the €70,000 limit in section 21(c)(iii) of the Finance Bill 2018 begins to accumulate; if it applies to relief obtained from the enactment of the Bill or if it is retrospective in nature; if stamp duty relief received by a farmer that inherited land last year would count towards the €70,000 limit; and if he will make a statement on the matter. [49968/18]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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71. To ask the Minister for Finance the rationale to impose limits as outlined in Article 18 of Commission Regulation (EU) No. 702/2014 of 25 June 2014; and if he will make a statement on the matter. [49969/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 69 to 71, inclusive, together.

Commission Regulation (EU) No. 702/2014 of 25 June 2014, commonly known as the Agricultural Block Exemption Regulation (ABER), is the Regulation under which certain categories of State aid can be granted to the agricultural and forestry sectors. In relation to question 49969/18, ABER entered into force on 1 July 2014 and has had direct effect in all Member States since then. This means that the ABER rules apply directly to beneficiaries in Ireland regardless of our domestic Irish law and without having to be enacted in our tax legislation. Sections 21 (income tax and corporation tax measures) and 48 (stamp duty measures) of Finance Bill 2018 as passed by Dáil Éireann propose amendments to the relevant domestic tax legislation to provide greater clarity for the farming sector in relation to the ABER rules.

Article 18 of ABER sets out the specific requirements for the granting of start-up aid to young farmers, and the development of small farms, and stipulates, inter alia, that the amount of aid per young farmer is to be limited to €70,000. This limit is a lifetime limit that applies to the cumulative aid received under all schemes covered by Article 18 of ABER. The relevant schemes are:

- transfers of land to young trained farmers under section 81AA Stamp Duties Consolidation Act 1999;

- stock relief under section 667B Taxes Consolidation Act 1997;

- farm succession partnerships under section 667D Taxes Consolidation Act 1997.

The limits contained in the Finance Bill, once enacted, will be applied to claims for relief made in relation to stamp duty for transfers or conveyances of land executed on or after 1 January 2019, and for the year of assessment 2019 and subsequent years of assessment for stock relief and succession farm partnership relief. Anyone submitting a stamp duty return for conveyances or transfers of land executed on or after 1 January 2019, or income tax or corporation tax returns for the 2019 year of assessment onwards, must have regard to the amount of relief claimed since 1 July 2014. The total amount claimed over the period must not exceed €70,000.

As regards question 49967/18 and the example mentioned by the deputy, the inheritance of a family farm does not attract a stamp duty charge and, thus, is not affected by the €70,000 limit.

In relation to question 49968/18, I am advised by Revenue that the amount of aid granted under any of the three relevant schemes since 1 July 2014 must be taken into account when claiming any further relief in relation to stamp duty for transfers or conveyances of land executed on or after 1 January 2019, and for the year of assessment 2019 and subsequent years of assessment for stock relief and succession farm partnership relief. It should be emphasized that this is not a case of the retrospective application of the limit, as, as noted above, the EU Regulation that introduced it on 1 July 2014 had immediate legal effect in all EU Member States.

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