Clarification Provided on Tax Treatment of Basic Payment Entitlements Important for Many Farm Families – IFA

IFA Farm Business Chairman Tom Doyle has said that the clarification that has been provided by the Minister for Agriculture on the taxation treatment of the Basic Payment entitlements is important for many farm families.

He said, “I have formally raised this issue with the Department of Agriculture and the Revenue Commissioners over the past months, and am happy that the clarification I sought has now been provided. This information was urgently needed for families who are entering joint herd number or partnership arrangements in 2015 in particular”.

He continued, “As the old Single Payment entitlements are deemed to have expired at end 2014, with new Basic Payment entitlements to be established in 2015, there will be no Capital Tax implications for joint applicants for the Basic Payment scheme in 2015, as there has been no asset disposed. For the majority of other farmers, there is no change to their circumstances. In other words, entitlements will remain chargeable to Capital Gains Tax on future disposal, or qualifying for CGT Retirement Relief if disposed of with land”.

Mr Doyle concluded, “For farmers who purchased Single Payment entitlements in the last reform, it must be a straightforward process to offset the capital loss that they have experienced due to the expiration of these entitlements against future capital gains”.