IFA draws up its Budget wishlist
But the report highlights the importance of farming to the national economy. It contributed €10bn of exports in 2013, and significant employment growth.
The submission marks the drop in beef prices for 2014 as a major loss of confidence for producers; the previous year’s submission highlighted the need to support the national suckler herd — one year on and the plight of the suckler farmer is more perilous.
The Beef Data and Genomic Scheme, due to commence in 2015, seems removed from our current position. The submission notes the higher EU-financed budget for the new phase of our Rural Development Programme, and calls for its early implementation so that farmers can access funding for on-farm investment and supports.
On taxation, the IFA are again, as per 2013, insisting on the retention of the 90% Agricultural Relief and no further reductions in exemption thresholds (for gift and inheritance tax), a maintenance of the ‘pay and file’ dates for self-assessment, and an extension of the land-leasing tax exemption scheme to encourage uptake and land mobility.
The submission calls for the introduction of a tax-deposit scheme. These types of scheme are in France, New Zealand and Australia and allow farmers to set aside pre-taxed income into special savings accounts, which can be drawn down as taxable income in times of negative volatility.
This would mark a real shift in policy, enabling farmers to manage their incomes, cashflow, and tax liabilities in the new era of volatile market returns.
The submission also calls for a Phased Transfer Partnership (PTP) model. This originates from the IFA’s earlier Agri-Taxation Review examination and offers a structured approach to family-farm succession. The model suggests a phased transfer of the family farm, with a full transfer within a maximum period of ten years.
The PTP would involve a structured transfer contract, whereby parents and children (or niece/nephew) would work in partnership. Assets and liabilities of the partnership would transfer, over time, from parents to successors. The IFA suggests that 10% of the assets and liabilities would transfer to the successor per year, although there would be no transfer during the first two years of the partnership, nor before the farm owner reaches 55.
As an incentive to the farm holder/parents to enter into the contract, they would receive tax relief on a portion of their farm income. Also on the pre-Budget wishlist is a call for the simplification of income-tax returns for farmers with low turnover. This calls for an extension of the land- leasing income-tax exemption scheme to include instances where a farm has been leased to a company.
Also making the wishlist is the retention of Stamp Duty Consanguinity Relief for non-residential transfers — the current tax code gives a 50% discount to the otherwise applicable stamp duty rates in the case of farm transfers between blood relatives. The relief is due to expire on December 31, 2014.
