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5 2002

FINANCE ACT, 2002

CHAPTER 5

Capital Gains Tax

Amendment of section 598 (disposal of business or farm on “retirement”) of Principal Act.

59. —Section 598(1) of the Principal Act is amended in the definition of “qualifying assets” by substituting the following for paragraphs (ii) and (iii):

“(ii) (I) the shares or securities, which the individual has owned for a period of not less than 10 years ending with the disposal, being shares or securities of a relevant company that is a company—

(A) which has been a trading company, or a farming company, and the individual's family company, or

(B) which has been a member of a trading group, of which the holding company is the individual's family company,

during a period of not less than 10 years ending with the disposal and the individual has been a working director of the relevant company for a period of not less than 10 years during which period he or she has been a full-time working director of the relevant company for a period of not less than 5 years, and

(II) land, machinery or plant (if any) which the individual has owned for a period of not less than 10 years ending with the disposal, and which—

(A) was used throughout that period for the purposes of the relevant company, and

(B) is disposed of at the same time and to the same person as the shares or securities referred to in subparagraph (I),

(iii) land used for the purposes of farming carried on by the individual which he or she has owned and used for that purpose for a period of not less than 10 years ending with the transfer of an interest in that land for the purposes of complying with the terms of the Scheme, and

(iv) land which has been let by the individual at any time in the period of 5 years ending with the disposal, where—

(I) immediately before the time the land was first let in that period, the land was owned by the individual and used for the purposes of farming carried on by the individual for a period of not less than 10 years ending at that time, and

(II) the disposal is a disposal referred to in section 652(5)(a);”.

Amendment of section 600A (replacement of qualifying premises) of Principal Act.

60. —Section 600A of the Principal Act is amended in subsection (1)—

(a) in the definition of “qualifying premises” by substituting the following for paragraph (a):

“(a) in which there is one or more residential units,”,

and

(b) in the definition of “replacement premises” by substituting the following for paragraph (b):

“(b) in which the number of residential units is—

(i) not less than 3, and

(ii) not less than the number of residential units in the qualifying premises,”.

Amendment of section 605 (disposals to authority possessing compulsory purchase powers) of Principal Act.

61. —Section 605 of the Principal Act is amended—

(a) in subsection (1), by substituting the following for paragraph (c):

“(c) subject to subsection (4A), the original assets and the replacement assets are within one, and the same one, of the classes of assets specified in subsection (5),”,

and

(b) by inserting the following after subsection (4):

“(4A) Where the original assets is land which has been let by the person making the disposal at any time in the period of 5 years ending with the disposal and, immediately before the time the land was first let in that period, the land was owned by that person and used by that person for farming (within the meaning of section 654) for a period of not less than 10 years ending with the time the land was first so let, the land may be treated as being within Class 1, which is referred to in subsection (5).”.

Amendment of section 542 (time of disposal and acquisition) of Principal Act.

62. —Section 542(1) of the Principal Act is amended by inserting the following after paragraph (c):

“(d) Notwithstanding paragraph (c), for the purposes of the Capital Gains Tax Acts where a person who is engaged in farming (within the meaning of section 654) disposes of an interest in land to an authority possessing compulsory purchase powers, for the purposes mentioned in section 652(5)(a), and immediately before the disposal the land was used for the purposes of farming, the chargeable gain (if any) on the disposal shall be deemed to accrue in the year of assessment in which the person receives the consideration for the disposal.”.

Amendment of section 980 (deduction from consideration on disposal of certain assets) of Principal Act.

63. —Section 980 of the Principal Act is amended in subsection (3) by substituting “€500,000” for “€381,000”.