CGT Retirement Relief

W

wilson

Guest
The leaflet states that a gain on the disposal of a farm by a person over 55 for less than €500,000 is exempt from Capital Gains Tax. My wife who is 58 is selling 12 acres given to her by her father 9 years ago to an adjoining landowner. She did not work the land and was in fulltime employment over the period. Is she liable?
 
Wilson, the relevant legislative section you are referring to here is Section 598 of the Taxes Consolidation Act 1997 " Disposals of business or farm on "retirement" " . The relief is intended to reduce/eliminate CGT on a farmer disposing of farming assets on retirement or passing on the farm to the next generation. There are a lot of issues here which go beyond merely those of age, including that the assets must have been "used" throughout the 10 year period preceding disposal or passing on. Issues where the land is rented or where the farmer has availed of the Early Retirement Scheme may also come into play in determing the relief. Initially, given that she has held the assets for less than 10 years and that she has not "used them" in the business of farming may preclude her from this relief. However given the complexities of the issues involved and the potential CGT bill should she not be entitled to the relief, I would very strongly advise you to consult a tax comsultant or accountant who is experienced in the area of farming taxation. It would be more than well worth the cost.
 
Thanks for the advice Graham. She has had an offer of 270k without any planning application which is very good considering that we have been refused planning permission twice due to poor soil, no percolation. I think we will find a good tax consultant and perhaps save a packet by holding out till October when the 10 years will be up.
 
Wilson, as mentioned the 10 years relates to busines / farming assets. As I said, she may not be considered to be "retiring from business/farming" The figures you mentioned come to €22.5K/acre which may or may not be good for agricultural land depending on your part of the country but when you mentioned planning permission the issue of development land or development potentional raises its head. Find that good tax consultant, and best of luck.
 
She would not qualify as a"farmer" for this disposition as according to post she never actually worked the land herself.
 
Spoke to a very helpful guy in the local revenue office and he confirmed as you say breng that as she was in fulltime employment and not farming she does not qualify for the exemption. Thanks Guys.
 
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