Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

A comprehensive review of tax matters pertaining to the farming sector was announced in budget 2014 as a joint initiative between the Departments of Finance and Agriculture, Food and the Marine. The purpose of the review was to analyse the benefits of the various tax measures to the agricultural sector and the wider economy versus the costs to ensure tax policy aligned with the objectives set out in Food Harvest 2020.

The review focused on three key policy objectives for agri-taxation policy, including increasing mobility and productive use of land, assisting succession, and complementing wider agricultural policies and schemes through actions such as supporting investment to enhance competitiveness and environmental sustainability, alternative farming models such as farm partnership and the responses to increasing income volatility. Following this review, a significant number of measures were introduced, retained or refocused in the last two Finance Acts to assist with succession and support young trained farmers. These include, but are not limited to, targeting of capital acquisitions tax relief for agricultural property to ensure it is used by active farmers; broadening the capital gains tax requirement relief so that, for example, individuals can now lease out land for up to 25 years prior to disposal and still be eligible for CGT retirement relief; extending duty relief for non-residential land transfers between certain close relatives; extending general stock relief, stock relief for certain young trained farmers and stock relief for registered farm partnerships; and extending the stamp duty exemption for young trained farmers.

In addition, a new succession transfer partnership proposal was introduced in the Finance Act 2015, which is subject to State aid approval. There were a number of suggestions during the review regarding widening and accelerating capital allowances, but the review highlighted that capital allowances are the most costly to the Exchequer of any of the agri-tax measures.

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