Agricultural Stamp Duty Reliefs Renewed in Finance Bill 2020
IFA Farm Business Chair Rose Mary McDonagh welcomed the renewal of consanguinity (related persons) relief and consolidation relief under the stamp duty code in the Finance Bill 2020.
“These reliefs are vital to the sustainability and viability of the agricultural sector by reducing the effective rate of stamp duty on transfers of agricultural land from 7.5% to 1% in certain circumstances. They are crucial for greater land mobility which encourages land transfer and succession.”
As per the Finance Bill 2020 published last week, consanguinity relief is extended until December 31st, 2023. This relief applies to transfers of agricultural land between certain close relations such as parent to child or uncle to niece. In 2019, consanguinity relief provided relief from stamp duty collectively worth €28.76 million to 1,777 successful claimants.
“The relief is due to continue to operate in 2021 under the same conditions as heretofore. The draft Finance Bill does not propose any age limit on transferors,” she said.
However, it is important to note that the Budget 2021 Tax Expenditure Report states the case for reintroducing an age limit (formerly 67) for transferors should be examined jointly by the Department of Agriculture, Food and the Marine and the Department of Finance (with Revenue input) in 2021. IFA will be engaging with the Department on this issue. However, it is likely that no change will be announced before next year’s Budget.
Consolidation relief is extended until December 31st, 2022. This brings the relief’s renewal date in line with Farm Restructuring Relief from Capital Gains Tax. In 2019, consolidation relief was collectively worth €630,000 to the 85 farmers concerned.
“In tandem, consolidation relief and farm restructuring relief encourage the consolidation of farm holdings to reduce farm fragmentation. This can be done by selling and purchasing or exchanging parcels of land to bring them closer together. This improves the operation, efficiency and viability of farms.”
Young Trained Farmer relief from stamp duty expires on December 31st, 2021 and IFA will be seeking to have this relief extended in Budget 2022.
The Farm Business Chair concluded by saying that agriculture is a low-margin, highly capital-intensive business which requires investment in its primary asset – land. The reliefs mentioned above are imperative for generational renewal which is one of the nine objectives of the CAP.