A farmer left bereft over a council compulsorily purchasing farmland for €2.85 million has lost out to the Revenue Commissioners concerning a disputed Capital Gains Tax (CGT) bill.
This follows the Tax Appeals Commission (TAC) dismissing the farmer’s appeal concerning Revenue’s CGT bill for €44,185.
The case is now set to go before the High Court after the TAC confirmed that it has been requested to state and sign a case for the opinion of the High Court in respect of its just published determination.
The bill arose after the farmer received €2.85 million in February 2008 from an unnamed county council for 30ac of land that were subject to a Compulsory Purchase Order (CPO) to facilitate the construction of the motorway.
The farmer disputed the CGT bill claiming that he was entitled to tax relief in respect of certain sums received under the CPO.
When the case was heard by the TAC in June, the farmer stated that when the motorway was built, it went straight through both of his two farms.
He said that the motorway has had a huge effect not only on his ability to farm, but also his ability to access the land.
He contended that the actual shape of his fields are now problematic and that he is left with an area of land which is very difficult for farming, given the triangular shape of the land.
The farmer said that he may have had the option to begin milking, but that was taken away from him when the motorway was built, given that the areas of land were now split and he could not bring the cows over the bridge.
He added that he found the whole CPO process extremely stressful and that he never wanted the road.
The farmer said that it was a type of bereavement for him, having taken over the farm in 1977 and being a farmer since he was 15 years old. He stated that the farmland has been in his family for many years.
When cross examined by counsel for Revenue on one of the items claimed for, the farmer said that “he gave everything to his accountant as he is a farmer, not an accountant”.
In 2011, Revenue issued a Notice of Audit of the appellant’s tax affairs for the year 2008.
It was argued on behalf of the farmer that he has remedied the injury caused by the CPO, by purchasing a neighbouring farm for the sum of €1.3 million in mid April 2008 and carrying out works and relevant tax relief was available to him.
The farmer’s agent contended to Revenue in 2019 that his client could receive tax relief for “primarily the injurious affection for the agricultural land of €282,000 and €192,000, the €156,250 for reinvestment costs, €61,500 for ‘permanent disturbance; and €25,000 for temporary disturbance”.
The farmer argued that the overall €2.8 million sum received can be subdivided and specific sums allocated to headings of compensation – injurious affection, disturbance, severance and goodwill – and that different provisions apply.
The farmer submitted that they are to be regarded, not as a sum paid on disposal of the asset, but as a capital sum derived from an asset, where no asset is disposed of.
In June 2018, after a significant amount of correspondence between the parties, Revenue issued a CGT assessment of €44,185 for the year 2008.
The farmer claimed tax reliefs on the CGT in 2018 and also argued that relief was claimed in time contending that the four-year time limit for making an amended assessment does not apply in this case.
The Revenue Commissioners argued that the proposed subdivision of the overall €2.85 million sum is artificial and should not occur.
Revenue also argued that the farmer’s application for CGT tax relief was first mentioned in correspondence in January 2018 and was outside the four-year limit.
However, dismissing the farmer’s appeal, commissioner Claire Millrine found that the appellant did not succeeded in showing that the tax is not payable and the assessment shall stand.