Latest news with #AgriculturalRelief
Agriland
4 days ago
- Business
- Agriland
Minister urged to retain tax relief for farmers
The Irish Cattle and Sheep Farmers' Association (ICSA) is urging the Minister for Finance, Paschal Donohoe to retain key tax relief for farmers ahead of Budget 2026. ICSA Rural Development chair Edmond Phelan has said that the retention of key tax reliefs for farmers is absolutely vital, particularly in the context of generational renewal and the need to provide greater certainty for family farms. 'These reliefs – such as the Young Trained Farmer stamp duty exemption, Agricultural Relief from Capital Acquisitions Tax [CAT], and Farm Consolidation Relief – are not just technical tax measures,' Phelan said. 'They are essential supports that underpin efforts to improve farm viability, encourage land mobility, and, crucially, to support young people to enter and remain in farming. 'There should be no disincentives to farm transfers,' he said. The ICSA was responding to comments made by Minister for Finance Paschal Donohoe, who confirmed in response to a parliamentary question, reported by Agriland, that several farm-related tax relief schemes are currently under review ahead of Budget 2026. According to Minister Donohoe, a number of tax reliefs are due to 'sunset' at the end of 2025. The first scheme under review is the Accelerated Capital Allowance (income tax) for slurry storage. The second scheme the minister mentioned was the Young Trained Farmer (stamp duty) Relief. The Farm Consolidation (stamp duty) Relief is also under review and the minister also mentioned Revised CAT Agricultural Relief. Phelan said the looming expiry or 'sunset' of these schemes at the end of 2025 must be addressed with clarity and urgency. 'ICSA is calling on the Minister for Finance to commit to the long-term retention of these reliefs in Budget 2026,' the ICSA chair continued. 'Farmers need certainty to plan for succession, make investment decisions, and meet environmental obligations. The absence of a firm commitment to extend these measures risks creating unnecessary hesitation at a time when we should be incentivising action. 'The other targeted tax reliefs mentioned by Minister Donohoe – Farm Restructuring (CGT) Relief and the Accelerated Capital Allowance for slurry storage – are equally vital for improving both environmental performance and economic sustainability on farms,' he added. The farm group has said that all of these measures align with national goals around climate action, biodiversity, and generational renewal. It added that removing or weakening them would send the wrong message at a time when the sector is being asked to do more than ever.
Irish Examiner
13-05-2025
- Business
- Irish Examiner
Farm Finance: Is the review of Agricultural Relief only skin deep?
Agricultural Relief for the uninitiated is the main tax relief that allows farm land and certain other farming assets to effectively pass from one generation to the next without significant gift or inheritance tax. The relief works by reducing the taxable value of a gift or inheritance by 90% where the recipient meets certain requirements. Figures from the Revenue Commissioners for 2019 show that 1,413 beneficiaries availed of Agricultural Relief at an estimated cost to the Exchequer of €159m. However, this figure is likely to be significantly understated as some beneficiaries who availed of Agricultural Relief at that time did not file gift or inheritance tax returns where with the aid of Agricultural Relief the taxable value of their benefits was below their tax-free threshold. In the intervening years it has now become mandatory to file a tax return where a beneficiary wishes to claim agricultural relief and moreover the value of land has increased significantly particularly in areas where there is strong demand for land. Taking those two factors together it may well be the case that Agricultural Relief is worth multiple hundreds of millions of euros to farm successors per year and hopefully more up-to-date figures will be released either by the Tax Strategy Group or by the Revenue Commissioners directly which would aid a more informed debate. The phenomenon of non-farming persons buying up land for tax purposes as a means of passing on wealth has become more than just an anecdote and many farmers will be aware of farms that have been bought for tax reasons. The problem was exacerbated over recent decades also by the attractiveness to a perspective buyer that rent from the farm land could also qualify for income tax exemption applicable to land owners engaging in long-term leasing. This latter tax relief has now been extinguished to some degree since January 1, 2025, in the case of lands purchased, however the underlying issue of non-farming interests buying up land for tax purposes to allow for tax efficient transfer of wealth persists. Presently, there is no limit on agricultural relief and taking an extreme example to highlight the issue a wealthy individual could gift €100m worth of land to their child at a tax cost of a little over €3.1m or around 3% tax cost compared to the 'normal' headline gift and inheritance tax rates of 33%, with that super low rate of near 3% applying even where the successor leases out their farm where relevant conditions are met. The 2025 Budget announced last October sought to restrict Agricultural Relief by insisting that the transferer must either have been a full-time or trained farmer or have leased the farm to such a farmer for the six years as a prerequisite to the successor being entitled to avail of agricultural relief. But the legislation drafted whilst having good intent failed to recognise simple yet common issues prevalent on Irish farmers, such as land being owned by one spouse but worked by another, or where land was made available to a child not formalised via a lease, or where the individual who owned the land was no longer capable of making a lease (such as the case of land owners with mental capacity issues). The upshot from the post-Budget analysis was that the proposed changes to the relief were to be reviewed, but here is where the issue is in danger of being only a skin deep review. The tax relief system in Ireland, including the aforementioned agricultural relief, but also stamp duty relief and income tax reliefs have aligned over recent decades to effectively create substantially no disadvantages in owning land for the purposes of long-term leasing and that such land can be passed from one generation to another where the successor also continues to engage in leasing. Ireland has a long history of more than 100 years where tenants struggled bitterly to gain the rights to buy out their lands from their landlords such as through the passing of the Purchase of Land (Ireland) Act 1885. Some would argue that the land ownership system currently offers very few favours to those who derive their living from farming and who wish to grow their farm businesses ahead of those who choose to invest or remain invested in agricultural land as landlords. To my mind, that bigger question of where we want land ownership to rest is not simply confined to Agricultural Relief. Should the income tax exemption for leased land only apply for a certain limited period and not across multiple generations as is presently the case? Should the stamp duty rate for land purchases by investors or successors who lease out their land be at a higher rate than for farmers? These are just some of the questions that will be left unanswered without a comprehensive review of Ireland's land ownership strategic objectives. Read More Kieran Coughlan: What to do with the farm if no one is interested in taking it over
