Q I’ve received notification from the Department that the transfer of entitlements I sold before 15 May has gone through. I also received the money from the deal. I was forced to sell them as I was not farming in 2013. The farmer leasing from me declined to buy them, so I sold them on the open market.

I talked to my accountant, but he said I might not be eligible for the capital gains tax exemption announced by Revenue, because I did not sell them to the actual farmer leasing the entitlements and land. Is this true? As it would mean a good deal of money to me.

No it is not true, but I can see where the confusion would come from. If you read the wording of the Revenue exemption, issued back in May, it does say that: “Lessors (owners) affected who dispose of their single payment entitlements before 15 May 2014 to lessees (farmer) will not be required to pay capital gains tax on these disposals”.

ADVERTISEMENT

I saw that at the time and got clarification from the Department that once owners got the leasee’s approval, the owner was allowed to sell them to another farmer.

To do this, the farmer has to write in with the transfer application that he was willing to terminate the entitlement element of the lease to facilitate a sale.

The fact the Department has cleared the sale transfer, means it has no problem with your transfer.

However, to be eligible for the CGT exemption, you must have been one of the 6,000 plus farmers written to by the Department of Agriculture, advising you that you had to dispose of entitlements before 15 May 2014.

The Minister for Finance said that he intended to introduce the provision in the Finance Bill 2014. This is due to be published after the budget in mid-October.

As you would not have had to submit a capital gains tax declaration until 15 December 2014, I would advise you to wait until the details are published in the Finance Bill.

The Department has also said it is progressing through transfer applications and is on target to ensure no payments will be delayed.

However, over 1,000 farmers that have been written to with queries have not replied. These cases cannot be processed until additional information is received.