Taxes Consolidation Act 1997 section 612

Scheme for retirement of farmers

Section 612 provides that a capital sum or premium received under the European Communities (Retirement of Farmers) Regulations 1974 is not treated as part of the consideration for a farm disposal and is therefore exempt from capital gains tax.

• The European Communities (Retirement of Farmers) Regulations 1974 encouraged older farmers to retire by providing an annual pension and a capital sum (called a premium) in addition to the normal purchase price on the sale of a farm.
• Section 612 provides that any such capital sum or premium is not to be included in the consideration for the disposal of the farm.
• The exemption applies whether or not an annuity is granted in place of the capital sum or premium.
• The effect is that such capital sums or premia are exempt from capital gains tax.