Agricultural tax relief back in the spotlight

Major changes to agricultural tax reliefs available on the inheritance of farmland are back in the spotlight, the Irish Farmers Journal has learned.

Significant amendments to the agricultural relief rules were announced in the budget and included in the Finance Bill last autumn, but were postponed to allow for stakeholder consultation.

However, the Department of Finance is now engaging with farm sector stakeholders regarding the controversial amendments.

The proposed changes require the person giving the property to be more active in farming than was previously the case.

Under the proposed changes the giver would have to own the land for six years, hold an agricultural qualification, spent 50% of their time working the land or had the ground leased to someone who met these requirements.

However, the farm organisations and ifac pointed out that the amendments, as they stood, meant the relief could not be accessed by some genuine farmers.

Unease

While the resumption of consultations has prompted some unease in farming circles, there is also an acceptance that access to the relief will have to be tightened up.

“We have to protect the relief for genuine farm families but restrict the potential for its abuse by non-farmers and other investors,” one farmer representative said.

Agricultural relief provides a 90% reduction in the market value of farm’s assets for capital acquisition tax purposes. This effectively cuts the tax charge on inheriting a farm by 90%.