Agriculture: Income tax credit welcomed by IFA and ICMSA
Credit of €5,000 per year for five years ‘significant and would help farm families’
Farming organisation have also welcomed an increase in the threshold for Capital Acquisitions Tax to €280,000.
Farming organisations have welcomed changes announced in the budget in relation to the self-employed and the transfer of farms from one generation to the next.
IFA president Eddie Downey said the tax credit of €5,000 per year for five years was significant and would help farm families deal with the real challenges of inter-generational transfer.
The proposal was put forward by the IFA as a means of speeding up the transfer of farms and getting new blood into the farming sector.
The tax credit can be shared between a farmer and his son or daughter over a five year period.
Mr Downey also welcomed the increase in the threshold for Capital Acquisitions Tax to €280,000 which reflects the increase in the value of assets.
He said the rollover of all existing farm tax reliefs for three years, including stock relief, is important for investment on farms.
ICMSA president John Comer described the introduction of an earned income credit of €550 per annum as a “historic first step” for the farming community in Ireland.
Mr Comer said the discrimination against farm families will fall from €1,650 per annum to €1,100 per annum.
“This is certainly represented progress on a very blatant injustice,” he said.
Mr Comer welcomed the extension of the various stock relief measures and the stamp duty relief for young farmers to December 2018 and also the increase in the Group A Capital Acquisitions Tax rate to €280,000 which will be of assistance to some farm families in transferring assets from one generation to the next.
The ICMSA welcomed the farm succession proposal but warned against an over-complexity of the scheme.
However, the ICMSA expressed regret at the absence of measures to deal with income volatility in the farming sector.
Macra na Feirme national president Seán Finan also welcomed the introduction of an income tax credit of up to €5,000 per annum for five years for those farming in a partnership who enter into an agreement to transfer the farm within a 10-year time-frame.
“This tax credit will encourage and promote progression planning on farm. This makes the model of farm partnership more attractive from a tax efficient position. This could be worth between €1,000 and €2,000 per annum over a five year period to the farm business, based on your income,” Mr Finan said.
He also welcomed the earned income tax credit.