IFA looks for land leasing tax exemptions to apply between siblings
An extension of the Land Leasing scheme, which would extend current tax exemptions to siblings, is being called for by the IFA.
As part of its pre-Budget submission, the IFA is looking for a change to the land leasing tax exemptions that currently does not allow family members avail of income tax exemptions. It is looking for an extension of the exemption so that one siblings could lease land to another sibling and avail of income tax exemptions.
However, IFA Economist Rowena Dwyer said it was vital that a stipulation would be in place to ensure that tax evasion does not occur.
IFA President Joe Healy said a proviso would be necessary to that under no circumstances should the lease be two ways. “This is not a facility to evade tax.”
According to Healy, approximately 2,000 farmers are engaged in land leasing and partnership arrangements, with great benefits for the sector, as more farmers move away from short-term leasing to more long0term rental arrangements.
The IFA says that the exclusion of a long-term lease agreement between siblings from the tax exemption scheme, is resulting in a situation where land owners have to decide between leasing the land to an unconnected third party, to avail of the tax exemption, or demand a higher rent to compensate for the lack of tax exemption.
Its proposal is that the scheme should be extended to leases between siblings, but with restrictions in place.