As the Minister stated in the Dáil, such a scheme would increase certainty about the timing of the transfer of a family farm to the next generation and greatly assist with long term planning and productivity. Such a partnership model would enable a gradual transfer of control and would also facilitate the transfer of knowledge and expertise from one generation to another. There are approximately 1,500 farm partnerships in Ireland today.
Under the proposed scheme, where a farmer wishes to pass his or her farm to the next generation of young trained farmers, they can form a “Succession Farm Partnership”. Ownership of 80% of the land will have to be passed to the next generation within 10 years. An income tax credit of up to €5,000 per annum for five years will be allocated to the partnership, to be split between the partners and in accordance with the profit sharing agreement.
It is proposed that to benefit from the tax incentives the young person must be under 40. Therefore, if they are 36 when they enter the partnership, they will only get 4 years of tax credits.
This measure is subject to EU State Aid approval but is a welcome proposal. We await this decision and the details of the Finance Bill with interest.
Under Budget 2016, in addition to the above proposed scheme a number of existing relief for farmers are being extended to 2018, namely General Stock Relief, Stock Relief for Farming Partnerships, Stock Relief for Young Trained Farmers, and the Stamp Duty Exemption for Young Trained Farmers.
Augustus Cullen Law have been providing property law advices for over 125 years. For any queries in respect to the above, or any property matters please do not hesitate to contact David Lavelle, Barbara Lydon or Ray Fitzpatrick.
20 October 2015