Minister for Finance Jack Chambers has confirmed in Budget 2025 that stock relief for farmers will be extended until 2027.
These reliefs were due to expire at the end of this year. However, Minister Chambers confirmed that stock relief will be extended to the end of 2027.
Stock relief is given as a deduction from trading income. It is calculated by reference to the increase in value of farm trading stock over an accounting period.
The deduction is a defined percentage of the increase in value of trading stock.
There are three rates of reliefs within stock relief.
The standard rate is 25% for all qualifying farmers; the stock relief for registered farm partnerships is 50%, subject to certain limits; and the stock relief for young trained farmers is 100%, subject to certain limits.
Budget 2025 also saw amendments to agricultural reliefs under Stamp Duty.
Minister Chambers said he would amend both the Young Trained Farmer Stamp Duty Relief and the Stamp Duty relief which applies to farmers who lease land.
The relief for young trained farmers will be revised so that it will be available where it is claimed by an individual farmer who carries on the farm business through a company.
The leasing relief will be amended to also include farmers who have chosen to carry out their farm business as a company.
Minister Chambers also announced an amendment to agricultural relief on gifts or inheritance of farmland.
Agricultural relief provides for a 90% write down on the value of agricultural property received as a gift or inheritance before Capital Acquisitions Tax (CAT) is charged on the remaining value, with the tax payable by the recipient of the gift or inheritance.
However, the relief comes with certain conditions. The property being received must be agricultural property, and must represent at least 80% of the value of the recipient’s total property.
The recipient must also satisfy the ‘active farmer test’, which means that they are required to:
- Farm the agricultural property on a commercial basis for at least six years, or:
- Lease the property to someone who farms the agricultural property on a commercial basis for at least six years.
However, Minister Chambers said today: “In recent years, agricultural land has increased in value above inflation and it is difficult for genuine farmers to purchase the land they need for farming.”
The minister said that the six-year active farmer test would be extended to the provider of the gift of the property as well as the recipient.
The minister said this would address the increased value of farmland and “concerns that agricultural relief is being used as part of tax planning strategies by wealthy individuals”.
The change announced today will “support current farmers and the next generation”, Minister Chambers said.