New law could hit farm inheritance, says SF

Farmers forced to find work abroad due to the recession could see their inheritance rights hit, Sinn Féin has warned.

The party’s Caoimhghín Ó Caoláin urged the Government to amend the Finance Bill to stop families being hit with capital acquisitions tax when farms are transferred.

He objected to a provision which states that the inheritor, or acquirer, would have to be in a position to continue actively farming the holding for six years or to lease it out for the same period.

“There is real concern for the position of inten-ded inheritors who plan to take over the farming enterprise but are forced to find work in the United State, Australia or New Zealand because there are no employment opportunities at home.

“The requirement is that 50% of the farmer’s time should be spent actively working on the farm. The option of 50% off-farm work has not been available to countless thousands of young people from a traditional farming background for the past decade, in particular.”

He used leaders’ questions to warn that people could face a 33% tax rate on inheritance when the bill is due to become law in January.

Tánaiste Joan Burton said the law was intended to improve the situation and had been broadly welcomed by farming groups.

“The reason time limits are provided for in respect of such transfers is that obviously when receiving inheritances or passing over inheritances or businesses to the next generation or to relatives, and doing so with a substantial tax mitigation, the Revenue Commissioners must be satisfied that it is in respect of bona fide participation in farming,” she said.