Taxes Consolidation Act 1997 section 604C

Exemption of certain payment entitlements

Section 604C provides an exemption from capital gains tax on the disposal by farmers of payment entitlements under the Single Payment Scheme, where those entitlements and the related land were fully leased in the scheme year 2013 and were transferred before 15 May 2014.

• The section was introduced to address the transition from the Single Payment Scheme to the Basic Payment Scheme under Common Agricultural Policy reform, which took effect from 1 January 2015.
• Where a farmer owned single payment entitlements in 2014 but had fully leased both the entitlements and the underlying land in 2013, neither the lessor nor the lessee would have qualified for the new Basic Payment Scheme unless the entitlements were permanently transferred to the lessee before 15 May 2014.
• The disposal of such payment entitlements in the scheme year 2014 (16 May 2013 to 15 May 2014) is exempt from capital gains tax, provided the entitlements and the land on which eligibility was based were fully leased in the scheme year 2013 (16 May 2012 to 15 May 2013).
• The exemption was announced by the Minister for Finance in May 2014 and given effect by section 51 of the Finance Act 2014, which inserted this section into the Taxes Consolidation Act 1997.