Dara Calleary (Mayo, Fianna Fail)
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75. To ask the Minister for Agriculture, Food and the Marine the support for farmers renting land and entitlement and the available back-up when these are sold out. [2621/16]

Simon Coveney (Cork South Central, Fine Gael)
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Increasing the mobility and the productive use of land was identified as a key policy objective in the Agri-Taxation Review, which was published as part of Budget 2015. While there is an active land rental market, the majority of these cases are for short-term ‘conacre’ lettings. Long-term leasing has a number of advantages over the conacre system and the Finance Act 2014 introduced measures to assist in rebalancing the market by enhancing the existing tax relief for income from long-term leasing, as follows:

-Increasing the income thresholds for relief from leasing income by 50%

-Introducing a fourth threshold for lease periods of 15 or more years

-Removing the lower age threshold of 40 years of age for eligibility

-Allowing non-connected limited companies as an eligible lessee.

EU Regulations governing the new Basic Payment Scheme provide for the transfer of entitlements by means of:

-Transfer by Sale of Entitlements

-Transfer by Gift

-Transfer by Inheritance

-Transfer by Lease/Rental agreement

-Transfer by Scission

-Transfer by Merger

-Transfer by Change of Legal Status

- Transfer by administrative change to the registration details on the herdnumber.

The market for entitlements by lease is an open market based on supply and demand and the Department is not involved. Since 2005, eligible lease income can include income from land and direct payment entitlements.

From 2016 onwards Basic Payment Scheme entitlements may be leased with or without land (although no tax relief is available where entitlements are leased without land). Entitlements sold without land in 2016 are subject to 50% claw back on the number of entitlements sold. Claw back does not apply to any other method of transfer of entitlements. All entitlements are subject to a two year usage rule whereby entitlements not used for 2 consecutive years are returned to the National Reserve and lost permanently to the farmer. Entitlements in the National Reserve are used primarily for distribution to eligible young farmers and new entrants to farming. Farmers who wish to transfer their entitlements or to have the registration details of the entitlements changed must submit a Transfer of Entitlements application to the Department. The 2016 Transfer of entitlements application form will be available on the Departments website shortly. The closing date for receipt of applications is 16 May 2016.

There has been anecdotal evidence of an increase in long-term leasing but there is no official data as there is a significant time-lag for Revenue information in this regard. In order to gauge the effectiveness of the recent changes, the Department carried out its own survey last summer. This indicated that a significant behavioural shift from renting on a conacre basis to longer-term leasing has occurred with 27% of respondents commencing a new long-term lease in 2015 and almost two-thirds of these indicating that it was the first time they had entered a long-term lease.