No further Cuts can be Sustained by Young Farmer – Macra
09 September 2009
The retention of the status quo for both young farmer Stock Relief and the reliefs under the transfer taxes for gift and inheritance of agricultural property are a must for young farmers.
Macra na Feirme national president Michael Gowing commenting after a meeting of Macra’s Agricultural Affairs committee last night on Macra’s pre budget submission said any change to the above measures would be totally anti young farmer and would pose the question does the Government want young farmers?
Young farmers have over the last year been exposed to a range of cuts, closures and suspension of schemes that facilitate them to get a foothold in business and an opportunity to grow and develop their businesses, in a sector that is creating 25% of total net foreign earnings for the Irish economy.
Currently, Stock Relief aids young farmers to build up stock numbers during their first four years in production and allows them to write off 100% of the increase in the value of their stock.
Secondly, current reliefs in terms of the transfer taxes include agricultural relief which is applicable where ‘agricultural property’ is passed to a qualifying transferee. Relief is given by reducing the market value on which Capital Acquisition Tax is calculated by 90%, provided that 80% of the gross assets being transferred are ‘agricultural assets.’ The Commission on Taxation are proposing a reduction from 90% to 75% which equates to a 60% reduction in real terms, as the value of the land acquired before a CAT liability of 25% is payable has reduced by 60%.
Mr. Gowing said ‘this is a very important relief to encourage young farmers to enter farming and to improve the age structure of the industry and it’s imperative that these individuals are able to avail of Agricultural relief when inheriting agricultural property’.
Also under the current Capital Gains Tax regime, Retirement Relief measures allow farmers transferring their agricultural property to a family member to be exempt to an unlimited amount from Capital Gains Tax on certain transfers; however the Commission on Taxation is now proposing a limit of 3 million. ‘Situations will arise where farmers who want to transfer their farms to family members will delay the transfer upon death. This slows down the transfer of farms to young farmers, he concluded.
