Budget highlights for farmers
Speaking in the Dail today, the Minister for Finance Michael Noonan said that prudent and responsible has got us to this point and that is how we will continue.
He also paid tribute to the agri-food sector, saying it is responsible for 170,000 jobs and that it is the biggest indigenous industry in the country.
Some of the highlights for famers announced today include:
- Capital Gains Tax will be extended to conacre to encourage long-lerm leasing.
- The Government is increasing the range of income averaging from three to five years.
- Farmers flat rate VAT for non registered farmers will increases from 5% to 5.2%.
- The current 40 year of age threshold for leasing relief will be removed.
- The bloodstock industry will receive an additional €6m for horse and dog racing.
Farming is our largest indigenous industry with an annual turnover of about €26 billion and 170,000 employees. It is not only important because of the number of people it employs but also because of where it employs those people – in every townland and along every byroad in Ireland.
I am publishing today the Agri-Taxation Review, which I announced in last year’s Budget. Arising from the recommendations in the Review, I am introducing a number of tax measures to support farming.
There will be no milk quotas from 2015 leading to new opportunities that we can exploit but we need to make additional land available to young and active farmers. Therefore, to encourage the long term leasing of land and improve productivity, I am:
- increasing the income tax exempt thresholds by 50% and introducing a new threshold for leases of 15 years and over;
- allowing relief where the lessee is a company;
- removing the current 40 years of age threshold for leasing relief;
- targeting CAT relief for agricultural property to ensure it is used by active farmers;
- broadening CGT retirement relief so that, for example, individuals can now lease out their land for up to 25 years prior to disposal and still be eligible for CGT retirement relief;
- extending CGT retirement relief to land let under conacre, which is disposed of, or converted to long term leasing before the end of 2016;
- extending stamp duty relief for non-residential land transfers between certain close relatives;
- removing stamp duty on agricultural leases in excess of 5 years; and
- extending CGT farm restructuring relief to the end of 2016 and broadening it to allow for restructuring through whole farm replacement.
Volatile agricultural prices make it difficult for farming families to earn a steady income over a number of years. To improve the situation, I am increasing the range for income averaging from 3 to 5 years. I am also allowing income averaging on farm income to be available to farmers who derive income from another trade or profession, if this is due to on-farm diversification. This measure will be reviewed after 3 years to assess how well it is working.
The farmers’ flat rate addition for farmers not registered for VAT is being increased from 5% to 5.2% with effect from the 1st of January 2015.
We will follow with details from the Minister for Agriculture, Food and the Marine Simon Coveney.