Income Tax

The exemption from income tax on long-term leasing of farmland is being enhanced. The requirement that the lessor is aged 40 years or over is being removed. The amount of income exempted is being increased by 50% - so that for example in the case of land leased for a seven-year period the exempt amount will increase from €15,000 to €22,500 – and a fourth category covering leases of 15 years’ duration is being introduced with an exemption of €40,000 per annum.

Changes have also been introduced to the “income averaging” method of taxing farm profits. The term is being increased from three years to five years and will now be extended to cases where there is on-farm diversification.

Capital Acquisitions Tax

This relief, which reduces the taxable value of agricultural assets for gift or inheritance tax by 90%, will now be available only for beneficiaries who are “active farmers” or alternatively those who let the property on a long-term lease to active farmers.

Capital Gains Tax

CGT retirement relief will now apply to the disposal of land that has been leased for 25 years up to the date of disposal – previously the maximum period of the lease was 15 years.
There is also currently a relief from CGT on farm restructurings. The first transaction in the restructuring had to take place by 31 December 2015 but this deadline is now being extended by 12 months.

Stamp Duty

Consanguinity relief reduces by 50% the stamp duty payable on transfers of certain assets between close blood relatives. This relief is being abolished from 31 December 2014, except it has been extended by three years in cases where the transferor is 65 years of age or under and the transferee is an active farmer.

Agricultural leases of between 5 and 35 years duration will also be exempt from stamp duty.

Value Added Tax

The unregistered farmer’s flat rate addition will be increased from 5% to 5.2%.