Specific Details
IFA Budget 2023 Submission - Agri Taxation
Intended results
Taxation Measures to Support Farm Succession, Transfer and Partnerships
- Agriculture is removed from the commercial definition and revised in line with the residential stamp duty charge of 1%, up to €1m, and 2% thereafter.
- The Young Trained Farmer Stamp Duty Relief is renewed with the age limit of 35 years retained.
- Amendment to allow the business plan can be submitted to Teagasc within 12 months of claim for the relief.
- The Enhanced Stock Relief for Young Trained Farmers is renewed
- The age limit of 35 is retained.
- The relief is renewed post-2022 with the total State Aid ceiling increased to €30,000.
- In order to increase uptake, the relief should be extended to a young farmer's off-farm income for three of the five years to allow the young farmer to invest some off-farm income in order to develop and expand the farm.
- The percentage of farm assets that a transferor must agree to transfer to the successor should be reduced.
- The age limit of 40 is retained.
- Young Trained Farmer Stamp Duty Relief should be fully removed from State Aid or the ceiling be increased to €150,000, to allow for greater land mobility, encourage land transfer and develop economically viable farm units.
- Consanguinity relief is retained in its current form.
- The retention of 90% Agricultural is critical to support the transfer of economically viable family farms. IFA also supports the commitment in the Programme for Government Our Shared Future to increase the Category A threshold (parent and child) from the current rate of €335,000 to €500,000 in future budgets.
- Due to changing demographics and family structures, the Favourite Nephew or Niece Relief should be extended to a Favourite Successor Relief, allowing the farm to be gifted to someone who would be in a better position to continue farming the land. The movement from Category B/C threshold to Category A would allow for less of a tax liability, protecting the sustainability of the farm and promote land mobility.
- No age limit requirements should be imposed on farmers seeking to avail of the relief when transferring land between generations.
- To avail of Agricultural Relief the transferor or transferee, or a combination of both, must pass the active farmer test set out under the current Agricultural relief clause for a minimum of 15 years.
- Where the above condition is met; to avail of Agricultural relief, the retention period of the individual receiving the gift or inheritance remains at 6 years.
- With effect from the passing of the legislation, where land is purchased by an investor; the retention period of the individual receiving the gift or inheritance should be increased from 6 to 15 years in respect of a claim for agricultural relief
- In addition, where land is purchased by an investor; any periods where land is leased to an active farmer do not count towards the retention period.
- Indexation relief should be restored and extended to include periods of ownership post 2002.
- Reviews and renewals of reliefs should be announced in advance of Budget Day, and afforded multi-annual timelines rather than on an ad hoc/annual basis.
- This essential grant, the funding for which is diminishing, is extended.
- If a landowner wishes to sell land to a long-term tenant, then the CGT Entrepreneur relief of 10% should apply to incentivise supporting the genuine farmer and giving the long-term tenant preferred status.
- Agricultural land that is subject to Compulsory Purchase Order (CPO) should not be categorised as ‘development' land and should still qualify for CGT Entrepreneur relief. Farmers cannot be disadvantaged by the State's decision to initiate a CPO.
- The lifetime limit of €1m on the CGT Entrepreneur relief should be increased in Budget 2023. The enhancement of CGT Entrepreneur Relief is an important measure to encourage risk-taking and investment, and the subsequent disposal of business assets during an individual's lifetime.
- The interaction between the two CGT reliefs should be removed allowing both reliefs to operate separately. An individual should be able to avail, in full, of the CGT Entrepreneur Relief and the CGT Retirement Relief over the course of their lifetime, subject to satisfying the qualifying conditions of each relief
- To encourage the transfer of a family farm into joint ownership at the time of inter-generational transfer, IFA believes that 90% Agricultural Relief should apply where the farm is transferred into joint names, and where the 80% asset test and the active farming requirement is satisfied by either spouse.
- Where a farmer has owned and used an asset for 10 years and the asset is transferred into joint names, the transferee spouse should inherit the same time ownership and usage status.
Taxation Measures to Mitigate Income Volatility
- The introduction of an agricultural Rainy-Day Fund, which allows all farmers to put aside a small percentage of their gross receipts, whether in their co-op, specially assigned bank account or State Farm Volatility Fund, which could be used by the National Treasury Management Agency (NTMA).
- The deferred funds could subsequently be draw down within the next 5 years and the tax due would be paid on the year of withdrawal; similar to how companies are allowed to offset their losses to protect the viability of the business by carrying it forward from a loss-making year to a profit-making year.
Removing Discrimination in the Tax System
- Cider producers manufacturing less than 15,000 hectolitres per annum of cider be permitted to avail of an excise relief programme.
- The excise relief should offer a 50% reduction in excise for small-scale apple cider producers.
- The discrimination of the application of the USC between PAYE and self-employed earners must be removed, aligning the self-employed with PAYE workers.
- Payment for the loss of this income i.e., forestry premium, should not be subject to Income Tax or Capital Gains Tax.
- The proposed Residential Zoned Land Tax will not apply to currently used agricultural land in a manner similar to the exemption provided under the Vacant Site Levy exemption.
- Intent of purpose involving potentially impacted lands (purchased or otherwise) should ultimately determine liability.
- A' right to be unzoned' must be secured within legislation or automatic ‘zoning reset' occur where actively used farm lands have been zoned for residential development by Local Authorities without any action/explicit consent on the part of the land owner, especially near smaller urban centres with less housing pressures.
- An independent, simple, cost-effective centralised mechanism of changing the zoned status of lands without justification must be provided for farmers wishing to change the zoned status of their land back to ‘agricultural use', with a legislative clause included within such applications that such lands cannot be subsequently acquired by Local Authorities by way of Compulsory Purchase Order.
- Revenue need to hold off any RZLT charges while a farmer is in the process of appealing their inclusion for the RZLT
- Revenue must reimburse any extra tax previously paid (including re-installation of all available tax credits) on the transfer of land where relevant (i.e. where zoned vs dezoned land valuations were utilised in assessments)
Health and Safety
- The revenue generated from the sugar tax on sweetened drinks should be directed towards the promotion of the consumption of fresh and healthy Irish Produce
Name of person primarily responsible for lobbying on this activity
Tim Cullinan, IFA President; Michael Biggins, IFA Rural Development Chairperson; Rose Mary McDonagh, IFA Farm Business Chairperson, Shane Whelan IFA Senior Policy Executive
Did any Designated Public Official(DPO) or former Designated Public Official(DPO) carry out lobbying activities on your behalf in relation to this return? You must include yourself, and answer Yes, if you are a current DPO or a DPO at any time in the past. (What is a Designated Public Official?)
No
Did you manage or direct a grassroots campaign?
Yes
What is the directive you gave to the grassroots campaigners?
To lobby members of the Oireachtas on the contents of the IFA's Budget 2023 Submission
Was this lobbying done on behalf of a client?
No
Mass communications
Letter All TDs
Submission All TDs
Letter All Senators
Submission All Senators
Lobbying activity
The following activities occurred for this specific Subject Matter Area.
Informal communication (2-5)
Designated public officials lobbied
The following DPOs were lobbied during this return period on this specific Subject Matter Area. These DPOs were involved in at least one of the Lobbying Activities listed above, but not necessarily all of them.
As returns are specific to a Subject Matter Area the above Lobbying Activities may be associated with multiple returns.
Charlie McConalogue
Minister (Department of Agriculture, Food and the Marine)
Paschal Donohoe
Minister (Department of Finance)
Michael McGrath
Minister (Department of Public Expenditure and Reform)
Mary Lou McDonald
TD (Dáil Éireann, the Oireachtas)
Matt Carthy
TD (Dáil Éireann, the Oireachtas)
Maria Byrne
Senator (Seanad)
Martin Heydon
Minister of State (Department of Agriculture, Food and the Marine)
Joe O'Brien
Minister of State (Department of Rural and Community Development)
Catherine Martin
TD (Dáil Éireann, the Oireachtas)
Anne Rabbitte
TD (Dáil Éireann, the Oireachtas)
Mary Butler
TD (Dáil Éireann, the Oireachtas)
James Browne
TD (Dáil Éireann, the Oireachtas)
Helen McEntee
TD (Dáil Éireann, the Oireachtas)
Peter Burke
Minister of State (Department of Housing, Local Government and Heritage)
Kevin Barrett
Special Adviser (Department of Public Expenditure and Reform)