Leases of farm land for solar energy development

Following a number of queries, Revenue have published a new Tax and Duty Manual Part 23-01-24 to clarify the availability of tax relief under section 664 TCA in respect of leases of land to solar energy companies for the purpose of solar energy development on the land.

Section 664 TCA provides for a relief where farm land is leased to a "qualifying lessee" in certain circumstances. Section 664(1)(a) TCA provides that the lessee must use the farm land leased from the lessor "for the purpose of a trade of farming".

The Revenue view is that a trade of farming for the purpose of section 664 means that the lessee is required to farm the land on a commercial basis and with a view to the realisation of profits. A lease of land by a solar energy company for the purpose of the installation of solar panels will not be regarded as a trade of farming for the purpose of section 664 TCA, notwithstanding that the company may agree to occupy some of the land around the solar panels for the purposes of husbandry.

23 May 2016