Capital gains tax relief on agri transactions

Budget 2013 included a new capital gains tax relief for agricultural land transactions leading to efficient farm restructuring.

The relief is aimed at improving the viability and efficiency of farm holdings. The commencement order to give legislative effect to the provision for the relief as outlined in the Finance Act 2013 has now been signed by the Minister for Finance.

Following on from this, guidelines for farmers wishing to avail of this new capital gains tax relief have been developed in conjunction with Teagasc and are now available here and These guidelines set out the procedures for the issuing of Farm Restructuring Certificates by Teagasc.

Minister Coveney commented:“This new relief on capital gains tax is an important support for farmers who are seeking to improve the viability and efficiency of their current holdings by selling an outlying parcel of land and purchasing another parcel which is closer to their remaining holding. In order to continue the progress being made in the sector towards achieving the ambitious growth targets in Food Harvest 2020, it is vital that we introduce new tools such as this to help address the structural challenges in the sector and thus increase the competitiveness of our farmers”.

The new relief is one of a number measures in place to help address the demographic and structural challenges facing the sector.  Enhanced tax reliefs are available to younger farmers in relation to increases in their stock in a given year and to land owners on income from long-term leasing of land, while recent tax changes have incentivised the earlier lifetime transfer of holdings. In addition, a number of supports and schemes are available under the Rural Development Plan to help Irish farmers to achieve higher levels of competitiveness.

The Minister added: “We must respond to the challenges facing the sector together if we are to build on the success achieved to date. I would encourage all farmers to actively engage in this process of modernisation by addressing issues such as responsible succession planning and the restructuring of inefficient holdings, and by realising the benefits offered by collaborative farming methods.”

To be eligible to claim the Capital Gains Tax relief, the sale and purchase of qualifying land(s) must occur within 24 months of each other with the initial sale or purchase of qualifying land taking place in the period 1 January 2013 – December 2015.

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