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Agri-Taxation Measures Positive

The results of the Agri-Taxation Review Group and the measures that followed in the budget are to be welcomed. Teagasc made a substantial submission to this group and many of the recommendations made have been taken up and will assist farm families in succession planning and assist younger farmers to expand their enterprises in a sustainable manner.

Fintan Phelan Head of Teagasc Farm Management and Rural Development Knowledge Transfer Department said:” Teagasc research was widely used in the report. Teagasc provided data which assisted the external consultants Indecon to evaluate the benefits of the existing measures. The measures announced in the budget will help by giving people more certainty to plan for their own and their family’s future in farming.”

The Agri-Taxation Report sets out three main policy objectives, which are:

  1. Increase the mobility and the productive use of land
  2. Assist succession
  3. Complement wider agriculture policies and schemes

Some of the specific measures which are welcome include:

  • Land Leasing – increase in thresholds by 50%. Removal of the 40 year age limit, allowing non connected companies as an eligible lessee and removal of stamp duty for long term leases.
  • Land Transfer Taxation – Retention of Agricultural Relief from Capital Acquisitions Tax, new link to long term leasing, retention of retirement relief from Capital Gains Tax at current levels, extending the eligible letting period to 25 years, extending stamp duty consanguinity relief and other stamp duty exemptions on land transfer.
  • Capital Gains Tax Farm Restructuring Relief – This was due to expire at the end of 2015 but has been extended to the end of 2016 and crucially the disposal of a complete farm is to be eligible
  • Income Tax Measures – retaining current capital allowances, stock relief and enhance income averaging by increasing the period from 3 to 5 years
  • Alternative Farming Models – retain all current measures in relation to incentivising farm partnerships

The retention of the Agri-Taxation Working Group in place offers an opportunity for further enhancements in the future, in particular to the potential for a Phased Transfer Partnership Model. The recognition of the need to enhance the knowledge of farmers and their professional advisers in relation to the existing and enhanced measures that are now in place, is welcome.

Fintan Phelan said: “Our recent series of 11 Transferring the Family Farm Clinics around the country attracted over 3,000 farmers. This demonstrates the demand that is out there for good clear advice in this area. Farm families attending these clinics were advised on the importance of planning in time for the transfer of their farm business so that the various transfer taxes can be anticipated and planned for. Many of the attending families will no doubt be in touch with contacts they made during the clinics to discuss the implications of Budget 2015. The Teagasc clinics involved local solicitors, accountants, mediators, social protection, citizen’s information, Teagasc specialists and advisers.”