If you are a young farmer or a new entrant to farming, take a look at some of the enhanced schemes and tax credits available to you.
Young Farmer Scheme
The Young Farmer Scheme provides an additional top-up payment to a qualifying farmer’s Basic Payment (BPS).
A separate fund, The National Reserve, may provide a top-up of entitlements to qualifying young farmers and new entrants who have an off-farm income of less than €40,000. Details of National Reserve availability for 2018 have not yet been provided.
Increased grant under TAMS
The Targeted Agricultural Modernisation Scheme (TAMS) offers grant aid for certain on-farm capital investments.
Generally the scheme offers grant aid of 40% towards the cost. However this is increased to 60% in the case of eligible young farmers.
Succession Farm Partnership tax credit
A new income tax incentive introduced in 2017 allows for an annual income tax credit of €5,000 for registered farm partnerships where the partnership is designed to transfer the farm business to a successor within 10 years.
The credit applies for up to five years and is split annually based on the profit sharing ratio of the partnership between the farmer and the successor.
The successor must be a trained farmer (i.e. with an accepted agricultural qualification), under the age of 40.
To avail of the Succession Farm Partnership Scheme, it is necessary to have a current partnership on the Department of Agriculture register of Farm Partnerships.
100% stock tax relief
Farmers can claim income tax relief in respect of increases in the value of a farm’s trading stock during an accounting period. The relief takes the form of a deduction allowed in the computing of trading profits.
Generally this relief is 25% of the amount of the increase in value at the end of the trading period.
Young Trained farmers, however, can claim 100% Stock Relief.
To be eligible for the 100% rate of relief the farmer must be less than 35 years of age before the commencement of the accounting year of tax assessment, have an accepted agricultural qualification, and submit a business plan before 31 October in the year following first year of assessment.
The 100% relief is available for four years beginning in the year in which the individual commences farming i.e. first becomes chargeable to income tax in respect of profits or gains from farming.
The amount of the relief received by a qualifying farmer cannot exceed €40,000 in a single tax year or in aggregate €70,000 over 4 years.
Stamp Duty Exemption
Transfers of land by gift of sale to farmers who are under 35, with an accepted agricultural qualification, are not subject to stamp duty.
The current normal rate of stamp duty for transfers of land by gift or sale is 2%.
In order to qualify, the Young Trained Farmer must, for a period of five years from the date of execution of the deed of transfer, spend at least 50% of his/her normal working time farming the land, and retain ownership of the land.