Six agri-tax reliefs have been extended until 2024 and 2025, following the passing of the EU Agricultural Block Exemption Regulation (ABER), Minister of State at the Department of Agriculture, Food and the Marine (DAFM) Martin Heydon has confirmed.
The Young Trained Farmer Stock Relief and the Registered Farm Partnership Stock Relief have both been extended until the end of 2024.
Meanwhile, the Young Trained Farmer (YTF) Stamp Duty Relief, the Farm Consolidation (Stamp Duty) Relief, the Farm Restructuring (CGT) Relief and a new accelerated capital allowance relief for expenditure on slurry storage, have all been extended until the end of 2025.
Government approved the extension of the reliefs, which were due to expire at the end of last year, ahead of Budget 2023.
Although these were legislated for in the 2022 Finance Act, they are still considered to be state aid and are dependent on the new ABER regulations, which were only agreed at EU level recently.
As these had not been agreed at the time of the budget, it was only possible at that time to extend the reliefs until June 30, 2023. Speaking about the announcement, Minister Heydon said:
“Reliefs around stamp duty, CGT, and stock are important tools to facilitate land mobility and encourage young farmers into the sector while the new relief around slurry storage has been widely welcomed.
“The timelines outlined today will give farmers certainty to plan for the time ahead to ensure they can maximise the benefit of these reliefs which are hard fought for every year,” he added.
Reliefs breakdown
Under the Young Trained Farmer relief, a full relief from Stamp Duty is available for the conveyance of farmland, where the recipient is under 35 years old and is the holder of a specified educational and training qualification.
In this case, the farmer must commit to retaining and farming the land for at least five years, and to spend no less than 50% of their normal working time on the farm.
The aim of this relief is to promote lifetime transfers of land and encourage young people into farming.
Farm Consolidation Stamp Duty Relief, meanwhile, provides that a stamp duty rate of 1% (instead of the normal 7.5% rate for non-residential property) can apply to acquisitions and disposals of land, where the transaction qualifies for a farm-restructuring certificate from Teagasc.
The purpose of this relief is to encourage the consolidation of farm holdings in order to reduce farm fragmentation and improve the operation and viability of farms.
The Farm Restructuring CGT Relief can be claimed on the profit of a disposal of farmland for farm restructuring purposes.
It provides a full relief from CGT when the purchase price of land exceeds the sale price, or a partial relief when the purchase price is lower than the sale price (when the proceeds of the sale are reinvested in new farmland).
The two stock reliefs that are being extended allow for a tax deduction based on increases in the value of farm trading stock.
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.
The rate of relief is 50% for registered farm partnerships, and 100% for young trained farmers.