Finance minister outlines tax laws for retiring farmers
The Minister for Finance, Paschal Donohoe has highlighted how Ireland is implementing recommendations from the Commission on Taxation and Welfare report about retirement relief for farmers.
The minister was responding to a parliamentary question from Social Democrats TD, Cian O'Callaghan on Tuesday (April 29).
Deputy O'Callaghan asked the minister for an update on the department's plans to implement the recommendations made in the report.
Minister Donohoe explained that the commission was asked to consider how the taxation and welfare systems can support economic activity, while ensuring there are sufficient resources available to cover the costs of public services.
He said: "The (report) the deputy is referring to provides a range of recommendations in relation to Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT). A number of those recommendations have been enacted in legislation.
"The commission recommended that a lifetime limit be introduced on retirement relief on the disposal of businesses and farms to the children of individuals who are disposing of such assets.
"As there was previously no lifetime limit in place to those receiving retirement relief from those assets disposed of by parents aged 55 to 65 to their children, the commission maintained that a cap should be introduced for the purposes of promoting fiscal sustainability and equity."
According to the minister, the Finance (No. 2) Act 2023 introduced the cap.
It states that for disposals to a child made on or after January 1, 2025, a lifetime limit of €10 million generally applies to the market value of the qualifying assets to which retirement relief applies.
A €3 million cap applies to disposals of qualifying assets by individuals aged 70 years and over.
Minister Donohoe also outlined that the Finance Act 2024 provides CGT liability on transfers that exceed the €10 million lifetime limit, made to a child on or after January 1, 2025.
This may be deferred by the individual making the transfer.
CGT liability that arises to an individual on the transfer of qualifying assets to a child on or after January 1, 2025, the value of which exceeds the €10 million lifetime limit.
Minister Donohoe said: "Further recommendations made by the commission in this chapter are under review by my officials on an ongoing basis.
"The commission clearly set out in its report that the recommendations are not intended to be implemented all at once, but rather provide a clear direction of travel for future governments around how the sustainability of the taxation and welfare systems may be improved," he added.
