Paschal Donohoe (Dublin Central, Fine Gael)
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I assume the Deputy is referring to the availability of Capital Acquisitions Tax (CAT) agricultural relief in respect of a gift or inheritance of a family farm where it includes land on which solar panels and / or wind turbines are installed.

Section 89 of the Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003) provides for a relief from CAT for gifts and inheritances of “agricultural property” where certain conditions are met. Where the relief applies, it operates by reducing the market value of qualifying assets by 90%, such that CAT is payable on the reduced value (after allowing for any unused group threshold amount).

For the purposes of the relief, “agricultural property” is defined in CATCA 2003 as:

• Agricultural land, pasture and woodlands situated in the State, an EU Member State or in the United Kingdom;
• Crops, trees and underwood growing on such land;
• Farm buildings, farm houses and mansion houses and dwelling houses (and the land on which they are situated) that are proportionate in size and character to the property;
• Farm machinery, livestock and bloodstock situated on such property;
• European Union ‘single-farm payment’ (within the meaning of Regulation (EU) 2021/2115 of the European Parliament and of the council of 2 December 2021)’

To qualify for the relief, the property comprised in the gift or inheritance must be agricultural property and the person receiving the gift or inheritance (the beneficiary) must qualify as a farmer for the purposes of section 89 CATCA 2003. The farmer test contains two separate tests, the “asset test” and the “active farmer” test.

To the meet the “asset test”, at least 80% of the beneficiary’s assets, after taking the gift or inheritance, must consist of agricultural property. To meet the “active farmer” test, the beneficiary is required to actively farm the agricultural property or lease the property to a person who actively farms the property.

The CATCA 2003 provides that agricultural land on which solar panels are installed is regarded as agricultural property for the purposes of the relief provided that the area occupied by the solar panels and any ancillary equipment does not exceed 50% of the land comprised in the gift or the inheritance and the remaining agricultural land is actively farmed. Accordingly, provided this 50% threshold is not breached, it is possible to avail of agricultural relief in respect of land occupied by solar panels and the presence of solar panels on the land will not affect the beneficiary’s ability to meet the 80% “asset test” in relation to the other agricultural property comprised in the gift or inheritance.

There is no similar provision in CATCA 2003 in respect of land occupied by wind turbines. I am advised that, therefore, it is not possible to avail of agricultural relief in respect of a gift or inheritance of land occupied by wind turbines. In addition, the presence of wind turbines on land that is comprised in a gift or inheritance may result in the beneficiary’s failure to meet the 80% asset test in relation to any property comprised in the gift or inheritance that does satisfy the definition of agricultural property. For example, if after taking the gift or inheritance the beneficiary’s assets comprise 70% land used for tillage and 30% used for wind farming, then the 80% test would not be satisfied and the relief would not apply.

Revenue has published detailed guidance on Agricultural Relief, which is available in the Agricultural Relief Tax and Duty Manual Part 11 at: www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part11.pdf