The agriculture sector “benefits from a comprehensive and generous range of tax reliefs”, according to a group which is chaired by the Department of Finance.
The Tax Strategy Group, which also includes senior officials and political advisers from a number of civil service departments, each year publishes a series of observational papers on possible options to be included in Budget 2024.
In its July 2023 paper on ‘Capital Taxes and Stamp Duty’, the group stated that there is currently a “particular emphasis on assisting succession and the intergenerational transfer of land, including a number of stamp duty reliefs”.
The group looked in depth at a number of current agri-tax reliefs including those in place that were designated as forms of state aid under the terms of the European Union’s Agricultural Block Exemption Regulation (ABER).
These included five agri-tax reliefs that had been due to expire at the end of 2022 but were extended:
- Young Trained Farmer Stamp Duty Relief to December 2025;
- Farm Consolidation (Stamp Duty) Relief December 2025;
- Farm Restructuring Relief December 2025;
- Young Trained Farmer Stock Relief to December 2024;
- Registered Farm Partnership Stock Relief December 2024.
The government also introduced in Budget 2023 accelerated capital allowance relief for construction of slurry storage for a period of three years.
In its latest report, the Tax Strategy Group stated: “The Department of Finance, in cooperation with Revenue and the Department of Agriculture, Food and the Marine, is continuing to examine the revised ABER for any further tax related implications, and if required will make any relevant recommendations to the minister for consideration ahead of Budget 2024.”
It highlighted that the agri-food sector accounts for almost 7% of Gross National Income (GNI) over 9% of exports in value terms and employs almost 165,000 people.
Tax reliefs
The group noted the decision by Revenue to accept courses recognised by Teagasc as “providing the appropriate course content” for farmers to be deemed eligible for agri-tax reliefs.
“The revised approach represents a simplification and improvement on the previous status quo and ensures there is one consolidated list of eligible qualifications which can be consulted by a tax payer.
“The list of eligible qualifications can now be updated by Teagasc on a dynamic basis as the courses offered evolve and change,” the report detailed.
According to the Tax Strategy Group the Department of Finance “will continue work to ensure that the stamp duty regime reflects government policy priorities and international best practice”.
It added: “The stamp duty policy area continues to be both an active and diverse one.
“With issues including housing/construction, banking, stock market listing, and various aspects of agriculture impacting on and or being impacted by stamp duty policy.”
Consanguinity stamp duty
Its latest paper also examined consanguinity relief which is due to expire at the end of 2023.
Currently, consanguinity (familial) stamp duty relief provides for a 1% rate of stamp duty to be applied on the transfer of agricultural land – by sale or purchase, exchange or gift – if is made to certain close relations including a husband, wife, child, step child, or nephew and niece.
The Tax Strategy Group highlighted that the agricultural land must be farmed in order to qualify for the relief.
It stated in the report: “Having last been extended for three years, consanguinity relief is due to expire at the end of this year.
“As such it is currently being reviewed by the department with a view to making recommendations to the minister in advance of Budget 2024 as to whether it should be retained beyond the current expiry date, and if so, for how long, and in its current or an amended form.
“As part of its review the department has engaged with farming representative bodies and the Department of Agriculture, Food and the Marine”.
The Tax Strategy Group noted that a report into the review of consanguinity stamp duty “will inform a recommendation to the minister for decision ahead of Budget 2024”.