Noonan stands over €26m tax break for farms
Published 10/07/2014 | 02:30
FINANCE Minister Michael Noonan is standing over his decision to allow a tax break which will benefit up to 6,500 farmers and is worth an estimated €26m.
The tax break gives an exemption from capital gains tax to inactive farmers who sold their entitlements to EU single farm payments before May of this year.
The move meant the farmers would be cashing in their assets, leaving them subject to a substantial bill.
The change came about after representations made by Agriculture Minister Simon Coveney. In documentation released under the Freedom of Information Act, officials told Mr Noonan the tax break was not warranted.
Fianna Fail finance spokesman Michael McGrath said Mr Noonan needed to explain the rationale behind the move. "All tax breaks should be accompanied by a full cost benefit analysis," he said.
A Department of Finance spokesman said the advice from officials was finely balanced.
"The decision presented two courses of action," the spokesman said.
Mr Coveney sought the tax exemption for a group of farmers who were effectively required to transfer their farm payment entitlements, and therefore incur a tax liability as a result of a technical change in EU rules as part of the recent reform of the Common Agriculture Policy.