There was a generally positive reaction to Budget 2015 from farm organisations and stakeholders following its announcement by the Minister for Finance Michael Noonan.
The President of ICOS, Bertie O’Leary has welcomed proposals to increase the income tax exempt thresholds by 50%, together with the introduction of a new threshold for leases of 15 years and over and the removal of the current 40 years of age threshold for leasing relief.
He said this will provide greater certainty when it comes to succession planning. It should facilitate more frequent and earlier transfer of productive assets to a younger generation of trained farmers. “This will create consequent benefits with increased output from farms and increased value added from the agri-sector.”
ICSA president Patrick Kent has also welcomed measures outlined in Budget 2015 which will encourage long-term leasing and support land mobility to progressive farmers, but he said that the agri-taxation review has not gone far enough to support collaborative farming arrangements.
“The 50% increase in income tax exemption for long-term leases and greater flexibility is a positive move, as is extending the relief to farmers under 40 years old,” he said. “However more needs to be done to incentivise farm partnerships. The taxation incentives outlined here are geared towards leaving farming and leasing out to unconnected third parties.”
“The extension of farm restructuring relief to cover whole farm disposals is also a positive move for those cases where there is an opportunity to buy a less fragmented holding, and this is something ICSA lobbied for in its agri-taxation submission. However, we are disappointed that there is no specific move to introduce a more explicit means of saving profits in a good year to make provision for a bad year.”
Reacting to today’s Budget announcement, IFA President Eddie Downey stated that the tax changes were positive but more funding is required for GLAS. He said that farmers will feel short-changed on the funding provided by the Government for next year as part of the roll-out of the new Rural Development Programme 2015-2020 (RDP).
“It is unacceptable that hard-won European RDP money is replacing some national funding in 2015 and Minister Coveney must ensure that the 30,000 farmers entering GLAS get a significant payment next year”.
Macra National President, Kieran O’Dowd, welcomed measures in budget 2015 that encourage better access to land for young farmers. Macra, in it’s pre-budget submission sought supports for better access to land, long-term leasing and the disincentivisation of conacre.
He said that a 50% increase in the tax free thresholds for long term leases of 5 (18,750) 7 (22,500) and 10 years (30,000) and the introduction of a new 15 year lease tax free threshold of €40,000 for lessors of any age will help increase the level of land on long term leases. “Currently only 6,250 leases claim the current tax relief where as, nearly 40,000 rental arrangement are on a conacre or yearly basis. This is not a sustainable basis for young farmers to establish and grow their business. Minster Coveney is following through with practical taxation measures to encourage greater land mobility.”