Proposed changes set out in Budget 2025 to Agricultural Relief are a “backward step” and could have “serious implications” for family farms, the Irish Creamery Milk Suppliers Association (ICMSA) warned today (Thursday, October 24).
Denis Drennan, president of the ICSMA, has now called on the government to “suspend” the proposed changes.
Drennan said this should be taken on board by the government because of the confirmation of the chair and various members of the new Commission on Generational Renewal in Farming by the Minister for Agriculture, Food and the Marine earlier this week.
The ICMSA president expects the commission to put forward its own proposals “regarding the transfer of farmland” and he believes that it is “only logical” that the government should therefore pause the proposed changes to Agricultural Relief.
Agricultural Relief
In his first budget earlier this month the Minister for Finance, Jack Chambers, said that Agricultural Relief “promotes the transfer of farms from one generation to the next”.
Minister Chamber also acknowledged that it “is an important measure to allow our young people to pursue their lives on the family farm”.
He said that because agricultural land had “increased in value above inflation” it was difficult for genuine farmers to purchase the land they need for farming.
“To address this and concerns that Agricultural Relief is being used as part of tax planning strategies by wealthy individuals, I am extending the six-year active farmer test to the person who provides the gift or inheritance.
“This measure supports current farmers and the next generation,” Minister Chambers said.
But this move has sparked concern for farm families and agricultural advisors because, according to the ICMSA, of the “extremely complex nature of the proposal”.
It believes that in their current form the proposals set out in Budget 2025 “will expose some farm families to tax bills that will mean the farm will probably have to be sold”.
The ICMSA said that this then defeats the purpose of the proposals and “will do absolutely nothing to address the impact of outside investors driving up land prices to unsustainable levels”.
Instead it is calling for the taxation system to be designed “to ensure that a farm can transfer to the next generation in a tax efficient manner allowing the next generation to invest in their future in farming without facing a crippling tax bill”.
The ICMSA believes that the current proposals could mean that some people will “no longer qualify for the relief” and that the proposals also pose questions for people farming in partnerships and companies.