Farmers get tax reliefs to encourage leasing

Increased income tax exemption thresholds; extended tax reliefs; and the removal of the lower age threshold of 40 for leasing relief are some of the measures aimed at making additional land available to young and active farmers following the Government’s agri-taxation review.

Finance Minister Michael Noonan announced the review of tax measures in the farming sector in last year’s budget, and its findings were published yesterday.

He said farming was the country’s largest indigenous industry with an annual turnover of about €26bn. Measures introduced to encourage the long-term leasing of land in yesterday’s budget include:

nAn increase of the income tax exempt thresholds by 50% and introducing a new threshold for leases of 15 years and over;

* Allowing relief where the lessee is a company;

* Removing the current 40 years of age threshold for leasing relief;

* Targeting capital acquisitions tax relief for agricultural property to ensure it is used by active farmers;

* Broadening capital gains tax retirement relief;

* Extending CGT retirement relief to land let under conacre, disposed of, or converted to long-term leasing before the end of 2016;

* Extending stamp duty relief for non-residential land transfers between certain close relatives;

* Removing stamp duty on agricultural leases in excess of five years;

* Extending CGT farm restructuring relief to the end of 2016 and broadening it to allow for restructuring through whole farm replacement.

“There will be no milk quotas from 2015 leading to new opportunities that we can exploit but we need to make additional land available to young and active farmers,” Mr Noonan told the Dáil.

Mr Noonan said volatile agricultural prices make it difficult for farming families to earn a steady income over a number of years.

“To improve the situation, I am increasing the range for income averaging from three to five years. I am also allowing income averaging on farm income to be available to farmers who derive income from another trade or profession, if this is due to on-farm diversification.

“This measure will be reviewed after three years to assess how well it is working.”

The farmers’ flat rate addition for farmers not registered for VAT is being increased from 5% to 5.2% with effect from January 1 next.

Mr Noonan said that marine is the next industry to undergo a review to analyse the financial and taxation supports available to the sector.