Farmers pressured to sell land by banks hit with Capital Gains Tax bill
Farmers who are being forced to sell land due to the non-payment of loans are still being hit with large Capital Gains Tax (CGT) bills, according to Fianna Fail TD, Jackie Cahill.
He has written to the Minister for Finance, Michael Noonan this week in regard to extending the CGT exemption that exists for farmers to consolidate their holding to farmers who are selling land to enable them to restructure their debts with the banks and enable their business to remain viable.
Cahill said that it is his view that both scenarios are similar as farmers in both cases are trying to keep their business viable into the future.
Cahill said he is hoping to get the measure included in the Finance Act.
A CGT relief for farm restructuring was introduced in Budget 2013 and initially only permitted the purchase and disposal of outlying parcels from the main farm hub as qualifying transactions.
It provides for a rollover relief for farm restructuring and parcel swaps with certain conditions to ensure a more efficient farm holding arises.
Changes announced in Budget 2015 allowed for whole farm replacement, i.e. the disposal of an entire smaller or fragmented farm holding and replacement with a larger or more efficient farm holding, and extended the timeframe for the first transaction to occur to the end of 2016.
The current rate of capital gains tax is 33%. Late payment of CGT can result in interest of up to 10% per annum on the outstanding liability. Failure to submit a return of the liability (even where payment is made) can result in an additional liability of 10% of the tax liability.