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ICSA Budget Briefing 2015

Oct 15, 2014 | Press Releases | 0 comments

15th October 2015

Taxation measures relevant to farmers

Income tax exemption for long term leasing

Amount of income exempted is increased by 50% and a new 4th threshold of 15 years or more has been introduced.

New exemptions:

Amount of income exempted from income tax

5-7 year leases: Up to €18,000

7-10 year leases: Up to €22,500

10-15 year leases: Up to €30,000

Leases longer than 15 years : Up to €40,000

Relief is also to be made available where a farmer leases out to a company, which will be relevant to potentially significant numbers of high margin dairy farmers who are or will consider incorporating their business.

The relief had been available only to farmers over 40 years old, that age threshold has now been abolished.

Other Income Tax measures

Income tax averaging to increase from 3 years to 5 years

Income tax averaging to allow for on-farm diversification income as well

Flat Rate VAT

The flat rate VAT refund to increase from 5% to 5.2% from 1 January 15 for non-VAT registered farmers.

Farm Restructuring Relief

Farm restructuring relief was introduced to facilitate consolidation of holdings so where a farmer sold an outside piece of land to buy a piece beside the home farm, there was an exemption from Capital Gains Tax. The relief was only available to 31 Dec 2015, this has been extended to 31 Dec 16 and the relief is now available for whole farm replacement (ie buy a whole farm and sell a fragmented holding in its entirety). ICSA had advocated both of these in our agri-taxation submission.

CGT Retirement Relief

CGT retirement relief is being amended to provide that land which has been leased out for up to 25 years (up from 15) in total ending with disposal will qualify.

Amendments are also being made to provide that (in the case of disposals outside the family) land currently let under conacre which ends with disposal on or before 31 Dec 16 or which before 31 Dec 1 is instead leased out for minimum 5 year leases to a max of 25 years ending with disposal, also qualify for CGT retirement relief.

CAT Agricultural Relief

Changes are being introduced to limit agricultural relief to active farmers or to individuals who are not active farmers but who lease out the property on a long-term lease to active farmers.

Stamp Duty

Agricultural leases of 5 years or more will be exempt from stamp duty.

Consanguinity relief from stamp duty which is due to expire on 31 Dec 14 will be extended for 3 years where the transferor is 65 years or under and the transferee is an active farmer.

Universal Social Charge

New Rates:

Incomes of €12,012 or less are exempt.

Otherwise,

€0 to €12,012 @1.5%

€12,013 to €17,576 @3.5%

€17,577 to €70,044 @ 7%

€70,045 to €100,000 @8%

Self-employed greater than €100,000 @11%

Income Tax

Standard rate band increased by €1,000 from €32,800 to €33,800 and €41,800 to €42,800 for married one earner couples.

Top rate cut from 41% to 40%

Farm Schemes

Total allocation for the Rural Development programme in 2015

€439 million compared to €405 million in 2014.

Beef Genomics

€52 million allocated, to give €100/cow for first 10, €80/head thereafter

Agri-environment

Allocation of €150 million to cover AEOS, REPS & GLAS.

GLAS allocation to facilitate 30,000 entrants in 2015 but starting date likely to be September 2015 so only a partial payment in 2015.

TAMS (on-farm investment)

€34 million to cover dairy equipment, sheep and cattle handling facilities, weighing scales.

Farm Safety

€12 million allocation to allow for grant aid of 40% for specific items to a maximum grant of €8,000 (see annex 1 for details) NB: Closing date for applications will be Friday 9th January 2015 and work completed by 31st August 2015)

Annex I – Farm Safety measures for grant aid (provisional)

Measure 121 On Farm Investment was reopened for applications in October 2014 and applications will be specifically limited to:

Safety Elements on Existing Farm Structures:

  • Safety Rails on Silo Walls
  • Safety Fencing for external slurry and effluent stores (including gate)
  • Solid Cover for External Slurry and Effluent Stores
  • Safety Covers on External Agitation Points or Manholes
  • Replacement of damaged slats (single/twin/gang) or replacement of existing internal agitation point with new gang slats
  • Replacement of hinged door/sheeted gate with a sliding door on agricultural buildings
  • Removal of end wall of tank and provision of external agitation point
  • Wiring/Rewiring of existing farm buildings Yard Lights (min 200W equivalent, either metal halide or LED)
  • Retrofitting roof clear-sheet (roof light) with safety cagesCirculation pipe (6″) to allow for agitation of slurry
  • Installation of calving gates
  • Simple aeration systems
  • Mobile Cattle Crush Unit (min 2.4m long)Mobile cattle penning max of 75 linear metres (in combination with a Cattle Handling unit)
  • Mobile cattle weighing scales
  • Leg hoist/ lifter
  • Head Scoop
  • Mobile specialised Sheep spraying equipment (with or without trailer)
  • Portable Sheep Handling Race with wheels (including footbath)
  • Portable Basic Sheep Handling Race
  • Mobile Sheep Weighing Facilities
  • Mobile Sheep Rollover Crates
  • Mobile Sheep “Batch” Footbaths
  • Mobile Sheep penning max of 75 linear metres (in combination with a Sheep Handling Race)
  • Mobile Sheep Adoption Unit FrontMobile Sheep Adoption Unit Front with penning

The grant rate will be 40 per cent up to a maximum eligible investment ceiling of €20,000, i.e. a maximum grant of €8,000.

The grant rate will be 40 per cent up to a maximum eligible investment ceiling of €20,000, i.e. a maximum grant of €8,000.

Annex 2 Spending Headlines for 2015 Department of Agriculture

  • · €439m for the Rural Development Programme
  • · €76.2 million for Fisheries including EFF, new EMFF, fishery harbours and marine related NCSSBs
  • · €195 million for Areas of Natural Constraint
  • €150.5 million for Agri-environmental schemes (REPS/AEOS/GLAS)
  • €110 million public capital for Forestry
  • €73.8 million for the Beef sector
  • €28 million for Research & Training
  • €81.5 million for Food Safety, Animal and Plant Health including €35 million for TB & Brucellosis eradication
  • €34 million for Targeted Agriculture Measures (TAMS)
  • €4 million for Sheep Technology Adoption Programme
  • €68 million in support of the Horse (€54.4m) and Greyhound (€13.6m) racing industries
  • €4.9 million for Animal Welfare
  • €200 million for Non-Commercial State Sponsored Bodies under the Department’s aegis
  • €1m for CEDRA related initiatives
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