Updated 7.03pm
MEASURES ANNOUNCED IN today’s Budget are set to benefit the farming industry by freeing up more land.
They have been welcomed by Macra and the Irish Cattle and Sheep Association.
The changes announced by Michael Noonan today include assistance for farmers who receive income from another job to supplement their income from agriculture, due to the “volatile” nature of agricultural prices, as long as this is the result of on-farm activities.
Income averaging will apply to this. All income averaging will also be extended from 3 to 5 years, but will be reviewed after three years.
The Minister for Finance highlighted the enormous contribution farming makes to the Irish economy. The sector employs as many as 170,000 people, and with an annual turnover of €26 billion.
The moves made today mainly centred on the Agri-Taxation Review, which was announced in last year’s Budget.
This process analysed a number of potential tax measures for the sector, with the view of ensuring ‘value for money for the economy’, and looked to strengthen existing supports available.
Minister for Finance Michael Noonan noted this afternoon that although there will be no milk quotas from 2015, there will need to more land available. Measures announced today target the long-term leasing of land.
Noonan said:
We need to make additional land available to young and active farmers.
The tax changes are aimed at incentivising long-term leasing arrangements. This includes an expansion of Capital Gains Tax retirement relief to land which is currently let under conacre and is either sold or placed on a long-term lease by the start of 2016.
The amount of income exempted from long-term leasing will be increased by 50% and a fourth threshold for lease periods of 15 or more years will be introduced, with income of up to €40,000 being exempted.
The current age limit of 40 for leasing relief will be removed.
There will also be an increase in the current farmer’s flat-rate VAT addition from 5% to 5.2%. Relief for farm restructuring is being expanded to include whole farm replacements.
Other measures include:
The measures have been welcomed by rural youth organisation Macra na Feirme.
“Access to land and the use of land are structural issues that prove a constraint on increasing output,” President Kieran O’Dowd said.
Short term land rental (conacre) is causing a major barrier for the progression of Irish farming, therefore incentives that encourage long term leases will favour the active use of the land and support active young farmers to grow their farm business.
The Irish Cattle and Sheep Farmers’ Association has said today’s Budget will encourage long-term leasing and support land mobility.
“The 50% increase in income tax exemption for long-term leases and greater flexibility is a positive move, as is extending the relief to farmers under 40 years old,” said Patrick Kent, ICSA President, “However more needs to be done to incentivise farm partnerships. The taxation incentives outlined here are geared towards leaving farming and leasing out to unconnected third parties.”
“The extension of farm restructuring relief to cover whole farm disposals is also a positive move for those cases where there is an opportunity to buy a less fragmented holding, and this is something ICSA lobbied for in its agri-taxation submission.”
However, we are disappointed that there is no specific move to introduce a more explicit means of saving profits in a good year to make provision for a bad year.
Originally published 3.31pm
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