Budget 2013 Education: Coveney in the dark on change to farm stamp duty relief

A budget decision to end stamp duty relief on the transfer of farm land — which has been roundly criticised by farming groups — came as a shock to the agriculture minister, it emerged last night.

Simon Coveney said he was not aware before Finance Minister Michael Noonan’s speech that the relief was apparently ending.

He said he is now seeking clarification from the Department of Finance about the matter.

However, it could be weeks before clarification emerges with the publication of the Finance Bill.

During his budget speech, Mr Noonan referred to a range of tax measures which supported farm expansion and the transfer of land.

He said he was extending the general 25% rate and the special 100% rate of stock relief, which were due to expire on Dec 31, for a further three years.

He said he would widen the definition of registered farm partnerships to add other production partnerships, such as beef, to the 640 milk production partnerships that can already avail of the enhanced 50% rate of stock relief.

He said qualifying, young, trained farmers in such partnerships can continue to avail of the 100% rate of stock relief.

He also introduced a relief from capital gains tax arising on disposals of farm land for farm restructuring purposes. This a once-off relief and will apply in respect of transactions initiated in the period from the start of Jan 2013 to the end of Dec 2015, subject to obtaining EU State-aid approval.

But he made no mention of continuing the stamp duty relief on land transfers, which has been a key taxation measure for years.

It exempts young trained farmers from stamp duty if lands are transferred to them before they turn 35.

Macra national president Alan Jagoe said he was “absolutely dismayed” the relief was not renewed.

“This all-important trigger mechanism was an essential and well established measure to effect the early transfer of farms to the next generation,” he said.

“This flies in the face of the Food Harvest 2020 ambitions. The timing of this cut could not be worse as it is widely acknowledged that measures to reverse the ageing profile of Irish farmers are more essential now in the context of the plans for the agri-food industry.”

Macra chief executive, Edmond Connolly, said the move would result in young farmers facing stamp duty bills of up to €20,000.

Mr Coveney said ministers were normally briefed on the morning of the budget on the various tax measures being planned.