Farm organisations have slammed proposals to Government from the Commission on Taxation which advises the Government to increase the tax take from family farm transfers.

The Commission on Taxation has proposed that the threshold for capital acquisitions tax (CAT) be "reduced substantially".

The proposals, leaked on Monday, would also see agricultural relief, which lowers the CAT liability farmers face, be reduced from the current 90% to 80%.

The full recommendations from the Commission are due to be published by Minister for Finance Pascal Donohoe on Wednesday and farm organisations have warned that these could contain significant changes to the tax system, including inheritance tax.

‘Abhorrent’

Irish Cattle and Sheep Farmers Association (ICSA) president Dermot Kelleher described the proposals to cut the CAT threshold from its current rate of €335,000, as well as cutting agricultural relief from 90% to 80%, as “abhorrent”.

“Our farming tradition is based on passing down farming enterprises through the generations, yet these are proposals that will actively prevent that from happening. They would decimate the future of family farming and destroy the future of agriculture in this country if they go ahead.

“Family farms being transferred to the next generation cannot be lumped with six-figure tax bills. Such tax bills would totally undermine the future viability of countless farming businesses.

"The next generation will either be unable to take over a family farm or will be completely put off from doing so - it is a simple as that,” he said.

Kelleher called for “every political party in the Dáil to clarify where they stand on these proposals”.

‘Huge tax burden’

Irish Farmers' Association (IFA) farm business chair Rose Mary McDonagh said the proposals “would place a huge tax burden on the next generation [of farmers] at a time when they will be seeking to invest in their farm enterprise”.

She warned that the IFA is totally opposed to any reduction in agricultural relief and suggested that the 90% agricultural relief has been a very important measure to encourage farm transfers and allow families to hand on the farm to the next generation.

“Land as an asset has a value far beyond what it generates in terms of income. Any reduction in the relief rate for inheritance would have a disproportionate impact on the farming sector. We will be meeting Oireachtas members on Wednesday and raising our very serious concerns about this proposal,” she said.

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