A large number of farmers purchased milk quotas which became worthless on 1 April 2015 when milk quotas were abolished. This resulted in a deemed disposal arising for capital gains tax (CGT) purposes under S538 TCA 1997 and in certain instances a capital loss could arise.

Revenue has issued eBrief No. 64/16 (on here) which gives guidance on the use of such losses.

Capital allowances were granted in respect of milk quotas that were purchased on or after 1 April 2000 and therefore where a loss arises in respect of a milk quota that was purchased on or after that date, the amount of the loss that is allowable for CGT purposes is restricted by the amount of the capital allowances that were granted. Revenue has updated its Tax and Duty manual which provides further details.