27 Nov 2014
CLARIFICATION ON FARMER DEFINITION FOR AGRICULTURAL AND STAMP DUTY RELIEFS WELCOME – DOYLEFarm Business & Credit
IFA Farm Business Chairman Tom Doyle has said the clarification provided by the Minister for Finance Michael Noonan, which states that farmers with off-farm employment will qualify for Agricultural Relief and Stamp Duty Consanguinity relief if they spend 20 hours a week working on their farm, is a positive development.
Tom Doyle said, “The retention of 90% Agricultural Relief and Stamp Duty Consanguinity Relief for active farmers in this year’s budget was a positive move. However, many part-time farmers were very concerned at the proposed definition of a farmer, as it was not clear what was meant by 50% of an individual’s ‘normal working time’”.
He continued, “IFA immediately highlighted the fact that this definition could be interpreted to require a farmer with an off-farm job of 40 hours a week to work a further 40 hours on their farm to qualify for the reliefs. This would clearly be unworkable and would have discriminated against thousands of genuine part-time farmers”.
Mr Doyle said, “In its detailed submission to the Minister for Finance, and in the meetings IFA held with TDs and officials from the Department of Finance and Agriculture, it was pointed out that a realistic definition of a farmer would have to take account of the part-time structure of many farming enterprises. It is now proposed by the Minister that an individual will be deemed to be a farmer if they have an agricultural qualification or if they spend not less than 50% of their normal working time farming. He has clarified that ‘normal working time’ will be 40 hours a week, and therefore a farmer with an off-farm job, but who works 20 hours a week on their farm, will meet this requirement. I believe now that the amended definition of a farmer is correctly targeted, covering both full and part-time farmers, and those with an agricultural qualification”.
Tom Doyle said it was also very important to note that IFA’s other suggested amendments have all been accepted and included in the revised Finance Bill. These include:
• Stamp Duty Consanguinity Relief (the halving of the 2% rate to 1% for transfers between family members) will apply to all qualifying transfers that take place until the end of 2015, regardless of the age of the transferor. Thereafter, it will apply where the transferor is aged 66 or less. The one-year lead in period for transfers with no upper age limit was proposed by IFA to allow existing farm owners who are aged over 66 to avail of the opportunity to transfer their farm over the next 12 months and avail of the special 1% stamp duty rate;
• Removal of the clawback of CGT retirement relief if the farm or part of the farm is disposed of within six years of the farm being transferred. This will allow farmers who have the opportunity to consolidate their farm within the first six years of taking ownership to take advantage of this opportunity.