Tuesday, 5 October 2021
Department of Finance
199. To ask the Minister for Finance if consideration has been given to increasing the State aid limit to young farmers regarding stamp duty; the engagements he has had and the actions that have been taken in this regard; and if he will make a statement on the matter. [48083/21]
207. To ask the Minister for Finance if consideration has been given to allowing young farmers to submit and have their business plans approved by Teagasc within 12 months of claiming young, trained farmer stamp relief duty; and if he will make a statement on the matter. [48092/21]
I propose to take Questions Nos. 177, 199, 207 and 208 together.
Stamp duty relief for young trained farmers provides for a total exemption from stamp duty (currently 7.5%) on either the transfer by gift, or purchase, of farmland (and associated buildings) where the recipient is a trained farmer under the age of 35 and meets other specified criteria. It is legislated for in Section 81AA on the Stamp Duties Consolidation Acts 1999 (SDCA 1999), titled “Transfers to young trained farmers”,
As with all such reliefs, it is subject to a number of terms and conditions. Section 81AA was introduced in Finance Act 2000, has since been extended on a number of occasions, and is currently due to expire on 31 December 2021.
The primary domestic and EU policy objective of this relief is to encourage the inter-generational transfers of agricultural land, with a secondary purpose being to increase the level and rate of adoption of new more productive and more environmentally friendly farming practices.
I expect to announce my plans for the future of this relief as part of Budget 2022, which I will be presenting on October 12th this year.
In respect of age limits, I am assuming the Deputy is again referring to the young trained farmer stamp duty relief. Section 81AA SDCA 1999) states in subsection (1) a “youngtrained farmer” is defined (in part) as being a “person who has not attained the age of 35 years on the date onwhich the instrument, in respect of which the relief is being claimedunder this section, was executed...”.
It is the view of the Department of Agriculture, Food and the Marine, that the age limit of 35 is appropriate, and should be retained. I support this view. This view is taken on the basis that, in order to seek to address the problems with the age profile of Irish farmers, 35 years of age as the cut-off point for availing of tax reliefs rather than a later age, is more likely to boost the incentive to, and benefit from age capped reliefs such as this one. Any increase in the age limit for this relief would only serve to reduce its intended effectiveness in this regard.
In regards to the state aid limit, Sections 21 and 48 of the Finance Act 2018 articulate the EU state aid related €70,000 lifetime limit that any one farmer can receive cumulatively under three farming related tax reliefs:
- the Young Trained Farmer stamp duty relief,
- the stock relief for young trained farmers and
- the succession farm partnerships tax credit.
This is in accordance with Article 18 of EU Regulation 702/2014. The reason that this limit was put in the Finance Act in 2018 was to provide clarity on these rules, which had existed since 2014.
As this limit is linked to an EU regulation, it is not possible to change it unilaterally. I do however understand that my colleague, the Minister for Agriculture, Food and the Marine, Mr. Charlie McConalogue T.D. has been seeking to have this issue addressed as part of the ongoing renegotiation of the Common Agricultural Policy.
To conclude, one of the conditions for availing of the Young Trained Farmer stamp duty relief is that an applicant must submit a business plan to Teagasc.
The submission of a business plan is a requirement under the EU state aid rules, and the Young Trained Farmer relief would not qualify as a permitted state aid under the ABER (Agricultural Block Exemption Regulation) without such a plan being required .
The IFA have proposed that it should be permissible for a business plan to be submitted up to 12 months after the relief is claimed. Allowing the submission of a business plan after an applicant had enjoyed the benefits of the relief, even with the introduction of the potential for a Revenue clawback in circumstances where a business plan was not supplied, is likely to weaken the relief’s case for being deemed a permissible state aid, and to be administratively burdensome.
I therefore have no plans to make a change of the type sought by the IFA.
180. To ask the Minister for Finance the estimated cost of increasing the age to avail of enhanced stock relief for young, trained farmers to 40; and if he will make a statement on the matter. [48060/21]
200. To ask the Minister for Finance the amount raised in enhanced stock relief for young, trained farmers aged 35 to 40, 41 to 45, 46 to 50 and 50+ in each of the years 2016 to 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [48085/21]
202. To ask the Minister for Finance the amount of relief claimed via enhanced stock relief for young, trained farmers; the number of those availing of the relief in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48087/21]
I propose to take Questions Nos. 180 and 200 to 202, inclusive, together.
Section 667B of the TCA provides for a scheme of enhanced stock relief at the rate of 100% for “qualifying farmers” (who are often referred to as young trained farmers). The measure is due to sunset on 31 December 2021.
I am advised by Revenue that tax returns do not contain the level of detail necessary to determine the number of relevant farmers up to 40 years of age who will meet the criteria required to claim the enhanced stock relief for young trained farmers, specifically the requirement that the taxpayer satisfies the academic and training standards. Therefore, Revenue further advise that it is not possible to estimate the cost of the policy measure outlined.
In relation to the amount claimed in enhanced stock relief, farmers in the age groups outlined by the Deputy are not eligible for the enhanced stock relief for young trained farmers, which is only available to farmers under the age of 35.
I am also advised by Revenue that the amount of relief claimed via enhanced stock relief for young trained farmers and the number of those availing of the relief are available on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf.
The following table contains data up to and including 2018, the latest year for which returns are currently available:
|No. of participants||420||530||500|
Section 668 of the Taxes Consolidation Act 1997 provides for a special application of general stock relief for farmers in respect of profits accruing as a result of the disposal of stock under statutory disease eradication measures. The special tax treatment operates in accordance with section 666 (general stock relief) but applies 100% (instead of 25%) relief in these specific circumstances.
Section 666 is due to sunset on 31 December 2021. As the Deputy will appreciate, matters concerning the introduction of new reliefs and the extension of existing reliefs fall to be considered by me in the context of the annual Budget and the subsequent Finance Bill. That process is underway.