Disposal of a Taxi Plate and Land let on Conacre

Disposal of a Taxi Plate

Q. Can a person who disposes of a taxi plate qualify for retirement relief in circumstances where, prior to the disposal, the person carried on a trade of taxi driver as well as allowing another person to operate as a ‘cosy’ driver on his/her plate?

A. Yes, provided the other conditions of the relief are met.

It is Revenue’s view that, in the circumstances outlined above, the disposal of a taxi plate is a disposal of qualifying assets for the purposes of retirement relief. Accordingly, provided all of the other conditions of the relief are met, the relief is allowable in full. The rationale for this view is set out below.

In Section 598 Taxes Consolidation Act 1997:

• Subsection 2 provides that retirement relief applies to an individual who disposes of the whole or part of his or her qualifying assets
• Under subsection 1, ‘qualifying Assets’, in relation to a disposal includes certain chargeable business assets
• Again under subsection 1, a ‘chargeable business asset’ is an asset which is an asset used for the purposes of a trade carried on by the individual.

The issue is whether a taxi plate is used for the purposes of a trade carried on by the individual. If it is, it is a chargeable business asset and therefore a qualifying asset (subject to the other conditions being met). In this case full relief is allowable. If it is not used for the purposes of a trade carried on by the individual, it is not a chargeable business asset and therefore not a qualifying asset in which case no relief is available.

Revenue take the view that the taxi plate is used for the purposes of a trade carried on by the taxi operator.

The fact that the taxi plate is also used by a cosy driver does not alter this. Taxi plates are now generally operated on a 24 hour basis; the cosy driver is in operation only when the owner (i.e. the individual claiming retirement relief) is not carrying on his/her trade. Accordingly, the whole of the asset is used for the purposes of the trade of the taxi operator for the hours during which he/she carries on the trade, and the same asset is used by a cosy driver in the period when the trade is not carried on.

Land let on Conacre

Q. Is farmland which has been let on conacre for a number of years prior to retirement by a retiring farmer who is over 55 years of age be regarded as ‘qualifying assets’ for the purposes of retirement relief?

A. No. A chargeable business asset is a qualifying asset only if it has been a chargeable business asset throughout the period of 10 years ending with the disposal of the asset. Accordingly, where land is let on conacre immediately prior to disposal, this requirement will not have been met and the relief will not be due.

It is worth noting, however, that as respects disposals on or after 6 April 1998, the definition of ‘qualifying assets’ includes land used for the purposes of farming carried on by the individual which he or she owned and used for that purpose for a period of 10 years ending with the transfer of an interest in the land for the purposes of complying with the terms of the Scheme of Early Retirement From Farming introduced by the Minister for Agriculture and Food for the purpose of implementing Council Regulation (EEC) No 2079/92 of 30 June 1992.