Lands that are rewilded or rewet to meet climate targets might not qualify for valuable tax benefits available to farmers, a leading tax consultant has warned.

Derek Andrews of Coventure Tax Consulting warned that rewilding and rewetting projects could come with “hidden tax costs” unless the land “remains under agricultural use in a recognisable form”.

“Although some of these lands might still qualify for limited agricultural use, the trend is clear: rewilded plots are being managed less like farms and more like conservation zones. This transition brings with it significant tax consequences,” he said. Among the benefits at risk is Agricultural Relief, which can cut inheritance or gift tax liabilities by up to 90%.

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“If farmland is passed on to a successor without farming activity, Agricultural Relief may be denied,” Andrews said, adding that “connected reliefs” could also be impacted.

“Retirement Relief on capital gains may no longer apply, if there is no evidence of an active trade being carried on at the time of disposal,” he pointed out. Other reliefs that could be at risk could be Consanguinity Relief on stamp duty, the Young Trained Farmer Relief, and the Business Property Relief, which can sometimes compensate for the loss of Agricultural Relief.

“Despite the rising interest in nature recovery, Revenue guidance has yet to catch up with this new form of land use,” Andrews said. “Without clear definitions or updated interpretations, advisers and landowners are operating in uncertain territory,” he added.

The Irish Natura and Hill Farmers Association president Vincent Roddy said his organisation has always been concerned about unintended consequences of the Nature Restoration Law (NRL), such as rewet or rewilded land remaining eligible for CAP supports.

“We are calling on the Government to provide clarity on these issues and assurances that there won’t be any negative impact for farmers in relation to tax or CAP supports from the NRL,” Roddy said.