Brendan Smith (Cavan-Monaghan, Fianna Fail)

Data from the CSO's Farm Structures Survey 2005 estimated that 8% of farm holders were under the age of 35. This figure is in line with the EU average and reflects the broad range of incentives in place to encourage the early transfer of family farms. These incentives include extensive tax reliefs that allow for family farms to be transferred without incurring stamp duty, capital gains tax and capital acquisitions tax.

I point out that stamp duty relief, which is specifically aimed at young farmers under the age of 35 who have attained certain agricultural qualifications, has been renewed in budget 2009 for four years until 31 December 2012. This is a very valuable relief that focuses on young farmers who are committed to pursuing a career in farming, and its renewal for a full four-year period reflects this Government's commitment to these farmers and their desire to enter the industry.

Stamp duty relief together with capital acquisitions tax (agricultural relief) and capital gains tax (retirement relief) ensures the majority of early farm transfers are exempt from tax. Several adjustments were made in the Finance Act 2007 to help overcome technical issues such as an adjustment to capital acquisition tax (agricultural relief) to allow for outstanding borrowings on an off-farm principal private residence when determining whether the recipient is eligible for agricultural relief.

Full capital gains tax (retirement relief) is available on disposals to family members, while relief is available on disposals to third parties up to the value of €750,000 and marginal relief on disposals above this threshold. An adjustment in the Finance Act 2007 allows farmers who had their farmland leased out prior to its disposal to a child to avail of capital gains tax (retirement relief), subject to certain conditions.

The 100% rate of stock relief for young farmers was also renewed in this year's budget for two years until 31 December 2010. This scheme is focused on new entrants who are building up the value of their herds.

In addition to the above measures, which are specifically aimed at new entrants, there are several other major incentives aimed at encouraging greater levels of land mobility. These include an income tax exemption for rental income received from the long-term lease of farmland. The substantial rental income exemptions are €12,000 on leases between five to seven years, €15,000 on leases between seven and ten years and €20,000 on leases over ten years.

Stamp duty relief for farm consolidation was renewed in budget 2009 for two years until 30 June 2011. It is available where a farmer is consolidating his or her holding through the purchase and sale of a parcel or parcels of land, subject to conditions set out in farm consolidation guidelines. This encourages farmers to swap land parcels to decrease the level of farm fragmentation and increase economic efficiency.

All these measures combined with the reduction in the top rate of stamp duty for agricultural land from 9% to 6% should help improve mobility of agricultural land and are substantial in reducing the set-up cost for young farmers. This extensive range of measures helps to improve the age profile of farming through early farm transfer or by encouraging greater levels of leasing, land swaps or farm consolidation allowing younger, more productive farmers to enter the industry.

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