Young Farmer Incentives

INCENTIVES SECURED BY MACRA FOR YOUNG TRAINED FARMERS

STAMP DUTY EXEMPTION Young trained farmers are currently exempt from stamp duty on receipt of a land transfer. The measure was recently secured until 31/12/2012

Installation Aid Under the Young Farmer Installation Aid Scheme young trained farmers taking over a farm were eligible for a payment of €15,000 towards installation costs. The scheme is currently suspended. Macra is currently lobbying for an improved package for new entrants as part of the revised CAP Post 2013. For further updates contact Derry Dillon at ddillon@macra.ie or call (01) 426 8904.

Milk Quota Exchange Young trained farmers under 35 years of age are eligible for 25% of the milk restructuring scheme. The scheme entitles young farmers to priority access to 25% of the milk restructuring pool up to 350,000 ltrs (77,000 gls).

The introduction of New Entrant Parent Partnership

Dairy Partnerships Subject to conditions, new entrants are able to acquire milk quota in their own names without having to establish separate facilities. This scheme has eliminated the inefficiencies that were created with the need to establish separate milking facilities in order to be regarded as a new entrant.

Dairy Partnerships Macra lobbied for a broadening of the dairy partnership rules to facilitate ‘non-traditional’ new entrants to dairying by forming a milk production partnership with an existing dairy farmer. These new entrants and farm managers are treated as an individual for the purpose of purchasing milk quota under the restructuring scheme.

New Entrant Dairy Scheme As part of the 1% per annum increase in milk quotas under the CAP Health Check Macra lobbied for the introduction of a new entrant dairy scheme. The scheme allows non-traditional new entrant to dairying, subject to criteria, to acquire a once of 200,000 litre milk quota allocation as a license to produce milk.

Introduction of the New Entrant category in the National Reserve Macra secured the inclusion of a category for new entrants to farming in the National Reserve under the Single Farm Payment regime.

Young trained farmers are eligible for 100% stock relief for the first four years in farming. The stock relief measure available to young trained farmers is of significant benefit as it enables young farmers to offset any increase in the value of stock against their tax liability on book profits. This measure effectively aids young farmers to build up stock numbers during their first four years. The relief was recently secured until 31/12/2010

100% tax relief on milk quota purchased Young farmers are eligible for 100% tax relief on milk quota purchased since 2000. This tax allowance is a valuable source of assistance to young farmers who are committed to the development of their enterprises.

No VAT on Single Farm Payment transfers The transfer of Single Farm Payment entitlements by gift is now VAT exempt. Macra secured this relief under the current Social Partnership deal, Towards 2016, Ten-Year Framework Social Partnership Agreement 2006-2015.

Changes to transfer tax codes Macra secured changes to the ‘transfer tax codes’ arising out of the introduction of the new entitlement regime under the Single Farm Payment. Single Farm Payment entitlements were included under the definition of a qualifying agricultural asset allowing farmers to avail of reliefs under Capital Gains and Capital Acquisitions Taxes and young trained farmers’ Stamp Duty Relief.

Land Leasing Macra secured exemptions for individuals leasing out their land on a long-term basis to €12,000 for leases of between five and seven years and €15,000 for leases of seven years or longer. Increasing the relief encourages farmers to long-term lease their land and Single Farm Payment entitlements and increasing the supply of land available to young trained farmers. There is also a tax exemption of €20,000 for ten year leases.

For more information, contact Derry Dillon Macra na Feirmes Agricultural Affairs and Rural Development Manager on on (01) 426 8904.