Finance minister considering reviews of stamp duty reliefs

The Minister for Finance, Paschal Donohoe, is considering two reviews of stamp duty reliefs for farmers in his preparation for Budget 2021, which is set to be revealed next Tuesday (October 13).

Both the consolidation relief and the consanguinity relief are due to expire at the end of this year. The Department of Finance carried out an evaluation of both reliefs which considered the case for amendment or extension of the two.

According to the Department of Finance’s Tax Strategy Group papers, which were released last month, both reviews have been submitted to the minister for his consideration in advance of the budget.

Consolidation relief allows relief from stamp duty when land transactions are used to consolidate fragmented farmland. Consanguinity relief allows relief from stamp duty for land transaction between certain relatives.

For both reliefs, the standard stamp duty rate of 7.5% for non-residential property is reduced to 1%.

The Tax Strategy Group noted in its papers that the continuation of both reliefs is strongly supported by both farmer organisations and the Department of Agriculture, Food and the Marine.

For consanguinity relief, the group said it “may be appropriate” to reconsider age limits in order to “underpin the policy objective of promoting succession”.

The papers also noted that the separate consolidation relief on Capital Gains Tax has already been extended to December 31, 2022.

Young trained farmers

The Tax Strategy Group papers also point out that “discrepancies” have arisen across various reliefs for young trained farmers, given the different specified agricultural qualifications needed to avail of relief.

“With changes in courses being offered, new courses being developed and others discontinued, it is administratively difficult to ensure the qualifications listed are kept up to date,” the papers argue.

The papers recommend a current list of approved agricultural course be centrally maintained centrally by the Department of Agriculture, with Teagasc retaining responsibility for approving the courses.

The Tax Strategy Group also suggests another option, whereby rather than requiring that an applicant for one of these reliefs hold at least one from a list of recognised and acceptable qualifications, it may be sufficient for them to self-certify that they have passed a course of education in agriculture, achieving an award at FETAC level 6 or its equivalent, a list of which would be maintained by Teagasc.

The papers also noted that there were different age limits under which farmers were considered ‘young’ across various young farmer reliefs, but that there may be “valid policy reasons” for this.