744. Deputy John Paul O'Shea asked the Tánaiste and Minister for Finance if he will consider amending the 80% rule in agricultural leasing and transfers in the agricultural relief asset test as part of Budget 2027; if he will consider a sliding percentage scale rule instead of the 80% which would assist small farm holdings; and if he will make a statement on the matter. [61623/26]

The purpose of CAT Agricultural Relief is to facilitate the transfer of agricultural property between generations by reducing its market value by 90% for tax purposes. It protects family farms from needing to be sold or broken up to pay high inheritance or gift tax liabilities and also ensures that the agricultural property is actively farmed.

Section 89 of the Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003) provides for a relief from CAT for gifts and inheritances of “agricultural property” where certain conditions are met. Where the relief applies, it operates by reducing the market value of qualifying assets by 90%, such that CAT is payable on the reduced value (after allowing for any unused group threshold amount).

To qualify for the relief, the property comprised in the gift or inheritance must be agricultural property and the person receiving the gift or inheritance (the beneficiary) must qualify as a farmer for the purposes of section 89 CATCA 2003. The farmer test contains two separate tests, the “asset test” and the “active farmer” test.

To the meet the “asset test”, at least 80% of the beneficiary’s assets, after taking the gift or inheritance, must consist of agricultural property. To meet the “active farmer” test, the beneficiary is required to actively farm the agricultural property or lease the property to a person who actively farms the property.

In 2025, CAT Agricultural Relief cost €263 million.

As with all taxes, Capital Acquisitions Tax and related reliefs are kept under review by officials in my department. It is a long-standing practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.