The Irish Farmers' Association - IFA

Lobbying Organisation The Irish Farmers' Association - IFA

Date published 20 Sep, 2021

Relevant Matter Public policy or programme

Public Policy Area Budgetary matters

Period 1 May, 2021 to 31 Aug, 2021

Specific Details IFA Budget 2022 Submission - Tax Measures to Support Growth & Restructuring.

Intended results Farm Succession, Transfer and Partnerships - Rates of Stamp Duty IFA proposes 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. Young Trained Farmer Stamp Duty Relief. IFA proposes The relief is renewed post-2021 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. Enhanced Stock Relief for Young Trained Farmers IFA proposes The relief is renewed post-2021. The age limit of 35 is retained. Enhanced Stock Relief for Farm Partnerships IFA proposes The relief is renewed post-2021 with the total State Aid ceiling increased to €30,000. Succession Tax Credit IFA proposes 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. Ceiling for Young Trained Farmer Reliefs IFA proposes 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 IFA proposes Consanguinity relief is retained in its current form. Agricultural/Business Relief Capital Acquisition Tax (CAT) Values IFA proposes 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. IFA proposes 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. IFA proposes No age limit requirements should be imposed on farmers seeking to avail of the relief when transferring land between generations. Agricultural Relief for the Genuine Farmer IFA proposes 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. IFA Proposes 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. Renewal of Agri-Tax Reliefs IFA proposes Reviews and renewals of reliefs should be announced in advance of Budget Day in October. Collaborative Farming Partnership Fund IFA proposes This essential grant, the funding for which is diminishing, is extended post-2021. Capital Gains Tax (CGT) Entrepreneur Relief IFA proposes 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. IFA proposes The lifetime limit of €1m on the CGT Entrepreneur relief should be increased in Budget 2022. 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. Interaction of CGT Entrepreneur Relief and CGT Retirement Relief IFA proposes 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 Agricultural Relief – Removal of Individual Qualifying Criteria IFA proposes 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. Forestry & CAT / Stamp Duty Relief IFA proposes If any percentage of the farm is dedicated to farm forestry, it should be defined as agricultural land and the CAT Agricultural Relief applied to the whole farm. Farm forestry is treated in a similar manner in relation to the Consanguinity and Young Trained Farmers Stamp Duty Reliefs as it is with CAT Agricultural Relief, where it is defined as agricultural land. IFA proposes Where a non-farmer buys forestry, the normal commercial rate of stamp duty should apply to the full value of land and timber. This is required to ensure forestry remains primarily in the hands of genuine farmers. Extending 10-year Ownership and Usage Period for CGT Retirement Relief to Spouse for Lifetime Transfers. IFA proposes 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. Income Averaging IFA proposes A farmer should be allowed to ‘step-out' of income averaging more than once in a five-year period, where they are not carrying an unpaid deferred tax amount from a previous ‘step-out', providing a strong incentive to repay the deferred tax also. IFA proposes The additional option to step-out of income averaging introduced for 2020 has laid the way for the permanent retention of 2 ‘step-out' years per 5-year cycle. For example, if the farmer ‘steps out' from income averaging in Year 1 and repays the deferred amount in Years 2 and 3, they should be eligible to ‘step-out' again in Years 4 or 5 of a cycle. Agricultural Rainy-Day Fund IFA proposes 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). IFA proposes 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 Stock Relief IFA proposes The relief is renewed post-2021. Removing Discrimination in the Tax System - Vaccines and Herd Health Products IFA proposes The Government should apply 0% VAT rate on non-oral animal medicines and vaccines to increase uptake Reduced Excise Duty for Apple Cider Growers IFA proposes Cider producers manufacturing less than 15,000 hectolitres per annum of cider be permitted to avail of an excise relief programme from 1st January 2022. The excise relief should offer a 50% reduction in excise for small-scale apple cider producers. Universal Social Charge for the Self-Employed IFA proposes The discrimination of the application of the USC between PAYE and self-employed earners must be removed, aligning the self-employed with PAYE workers. Tax Treatment of Payments Received for Use of Forestry Land by a Third Party IFA proposes Payment for the loss of this income i.e., forestry premium, should not be subject to Income Tax or Capital Gains Tax. Environment - Carbon Tax IFA proposes The Government has to honour its commitment in their Programme for Government Our Shared Future to allocate €1.5bn of carbon tax receipts over the next 10 years to a new ‘REPS-2' agri-environmental scheme. CGT / CAT Reliefs – Solar Leases IFA proposes The legislation is amended to give greater clarity and avoid the uncertainty that is impeding solar panel projects on farms. The calculations used to determine the area of land on which solar panels are installed, should only include the footprint of the structures mounting solar panels, ancillary equipment and service roadways (i.e., areas not capable of being grazed), and should exclude any area capable of being grazed by agricultural livestock either under, around or in between panels, ancillary equipment and roadways. Emission-Efficient Equipment / Capital Investment Incentive IFA proposes Farm equipment, which contributes to increased emission efficiency, such as LESS equipment or capital investment in developing bioeconomy supply chains, should qualify for accelerated capital allowances. This would be provided through an enhanced SEAI Accelerated Capital Allowance Scheme, which would operate under the same structures – i.e., 100% capital allowances for investment in equipment that is independently certified and listed by a qualifying authority. IFA proposes Farm equipment, which contributes to increased emission efficiency, such as LESS or capital investment in developing bioeconomy supply chains, should be exempt from VAT. Carbon Tax Relief IFA proposes Glasshouse growers of food crops using CO? enrichment, should be granted a Carbon Tax relief/rebate. Excise Duty on Fuel IFA proposes The current rates on fuel and diesel remain unchanged. Health and Safety - Sugar Sweetened Drinks Tax (SSDT) IFA proposes 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. Farm Safety Incentive IFA proposes Non-registered farmers should have the option to reclaim VAT on the cost of purchasing and maintaining farm safety equipment to help maintain best safety standards, via the VAT 58 form.

Name of person primarily responsible for lobbying on this activity Tim Cullinan IFA President, Damian McDonald IFA Director General, Rose Mary McDonagh IFA Farm Business Chair.

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 all Oireachtas Members on proposals in IFA's 2022 Budget Submission

Was this lobbying done on behalf of a client? No

Mass communications

Submission All Oireachtas Members

Letter All Oireachtas Members

Lobbying activity

The following activities occurred for this specific Subject Matter Area.

Email (11-20)

Informal communication (6-10)

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.

Ed Brophy Special Adviser (Department of Finance)

Grant Sweetnam Special Adviser (Department of Public Expenditure and Reform)

Kevin Barrett Special Adviser (Department of Public Expenditure and Reform)

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)

Eamon Ryan Minister (Department of Transport)

Martin Heydon Minister of State (Department of Agriculture, Food and the Marine)

Pippa Hackett Super Junior Minister (Department of Agriculture, Food and the Marine)

Stephen Donnelly Minister (Department of Health)

Brendan Smith TD (Dáil Éireann, the Oireachtas)

Joe O'Brien Minister of State (Department of Social Protection)

Anne Rabbitte TD (Dáil Éireann, the Oireachtas)

Brendan Gleeson Secretary General (Department of Agriculture, Food and the Marine)