Family Transfer Partnership is a complete new structure introduced in Budget 2016 by Minister Simon Coveney.

What is it?

It is a new structure in which family members will enter into a partnership with a view to a phased transfer of the farm. A profit-sharing arrangement has to be set out and a provision that the family farm will be transferred to the younger farmer at the end of an agreed period which cannot be more than 10 years.

Why was it brought in?

Many farm families want to transfer the family farm but are concerned that a full transfer is too big a decision and too abrupt a change. There is also the need to generate two income streams from the farm during the transfer and the older generation often has concerns over financial security

Who can enter into one?

It is aimed at family transfers from husband and wife to their sons and daughters. The Minister also confirmed that a favourite nephew or niece can take over under the scheme.

What are the benefits?

Both sides have to sit down and have a real conversation about the new option that is now on offer. The big carrot is the tax credit of €5,000 per annum for up to five years that is available under the scheme. That’s €25,000 in total available.

What is involved in setting up the partnership?

It will be similar to the existing partnerships being used. Seventy per cent of the 1,000 plus set up are already established between family members, so as the Minister said it is not rocket science. You must have a clear agreement with set-out profit sharing and outline when the farm will be transferred.

Are there any criteria to get it?

Yes. The young person must be under 40 to trigger the tax incentive. So to maximise the full five years, the young person has to be 35 years old. We have to wait until the Finance Bill to see if there are any off-farm income criteria.

Does it have to be done over 10 years?

No, the maximum is 10 years but the transfer can be completed fully as quickly as three years. It is up to the family to set this out.

Do you have to transfer all the farm?

No, but you have to transfer 80% of the agricultural assets at the end of the agreement. This is to allow the older generation keep some land for security.

Who gets the €5,000 tax credit?

The tax credit is divided between the partners based on the profit share agreement in the partnership. So if the agreement is 50/50, each partner would get €2,500 of a tax credit.

I am 38 and going to take over the family farm. Can I benefit?

Yes, you could set up a partnership and transfer over three years. The partnership will get the €5,000 tax credit until you are 40.

What happens if I fall out with my partners and decide not to go ahead?

Apart from the difficulties family disputes bring in these cases, there would be a clawback of the tax credit if the transfer does not go ahead as agreed.

How many partnership places are available?

The Minister has allocated €10m under the budget this year. This is adequate to give the tax relief to around 2,000. However, the Minister said it will be relooked at if there is demand as he feels it is money well spent.

When will it opened?

The incentive has to get cleared though EU state aid rules so it will likely be into 2016 before it is opened.

Full coverage

Budget 2016