Focus on Agri-Bsiness

Labour Party Seanad Agriculture spokesperson Susan O’Keeffe has welcomed the agri-business focus in the Finance Bill.

“Agri-business is an area where the potential for growth is huge. The measures taken in the Finance Bill underline the growing importance of the agri-business sector to the Irish economy and are an acknowledgment that the growth of the sector will be a significant factor in our economic recovery.”

The measures included in the Finance Bill include:

• New stock relief incentive for farm partnerships 
• Reduced stamp duty on agricultural land transactions
• Restructured Capital Gains Tax retirement relief 

“In addition to the significant measures announced in Budget 2012 an additional FETAC level 6 qualifying course in farm administration has been added alongside the major announcements in Budget 2012."

“I am delighted that the Government is continuing to support and prioritise the agri-business sector.”

1. Farm partnerships incentive

A new stock relief incentive to encourage farm partnerships will be introduced. An enhanced 50% stock relief will be available for all registered farm partnerships, and a 100% stock relief will be available for certain young trained farmers forming such partnerships. Subject to EU State Aid approval, this new incentive will be available until December 2015.

2. Reduced stamp duty on agricultural land

The stamp duty rate on agricultural land will be reduced from 6% to 2%. A half rate (1%) will be applicable to transfers to close relatives until the end of 2014. This change will substantially reduce the stamp duty payable on transfers of farm land by gift or by sale. It should stimulate a stagnant land market - currently only 0.5% of total agricultural land is offered for sale annually. It will also promote inter-generational transfer, with the cost of lifetime transfer to transferees who do not qualify for the young trained farmer stamp duty relief reduced considerably.

3. Restructuring of Capital Gains Tax retirement relief

Restructuring of the retirement relief on Capital Gains Tax to incentivise the earlier transfer of farm assets to the next generation, and to encourage the sale of land by those farmers with no successors. An upper limit of €3m will be introduced on family transfers where the individual transferring is aged over 66, compared to an unlimited amount currently. On non-family transfers, the current upper limit of €750,000 will be reduced to €500,000. These changes will apply from 2014 onwards, thereby allowing time for older farmers to plan for transfer. These changes will aid land mobility and improve the age profile of Irish farmers.

4. VAT rate on open farms

The VAT rate applied to open farms will be 9% rather than the new standard rate of 23%.  This will be of significant benefit to such farms, which offer an important opportunity for farm diversification. It brings the treatment of open farms into line with the VAT rate applied to museums and other cultural attractions.

5. Universal Social Charge

The exemption rate for the Universal Social Charge has been raised from €4,004 to €10,036. This will be of particular benefit to low-paid seasonal workers in the farming sector.

6. Carbon tax - offset of increased costs for agricultural diesel

Consistent with the commitment in the Programme for Government on carbon tax, farmers will be allowed a double income tax deduction in respect of the increased costs arising from the change in carbon tax (the carbon tax is to increase by €5 per tonne, the equivalent of 1.6 cents per litre of agricultural diesel).
7. Carbon tax for certain Combined Heat and Power (CHP)

Provision is made to allow for a partial relief from the carbon tax for certain Combined Heat and Power (CHP) installations not covered by the EU Emissions Trading Scheme.

8. VAT refund for wind turbines

An amendment to the VAT refund order for farm construction will allow farmers to claim a refund on wind turbines purchased from 1st January 2012.

9. Foreign Earnings Deduction

A Foreign Earnings Deduction will apply where an individual spends 60 days a year developing markets for Ireland in the BRICS countries (Brazil, Russia, India, China and South Africa). This will be of further benefit to a wide range of interests, including producers, retailers and exporters.

ENDS