€40m tax exemption is damage limitation rather than good news

Farmers may have been spared a tax bill of up to €40m by the new capital gains tax (CGT) exemption for certain farmers announced last week by Finance Minister Michael Noonan.

It looked like a bit of preelection good news from the Government — but it would be more accurately described as damage limitation.

Mr Noonan really had no choice but to turn down the potential tax windfall, because it was the Government and the EU which had — perhaps unwittingly — set a tax trap for farmers who were doing the right thing.