Of the €40 million at risk in leased entitlements under CAP reform, it has emerged that €12m is leased between farmers and their own limited companies. Farmers who have set up limited have expressed concern over how Single Farm Payment entitlements will be treated in the changeover to the new regime. The Department of Agriculture has stated that as the move to a limited company is deemed as a change in legal entity, there is no issue. The Department is adamant that a solution will be found to ensure leased entitlements will not be lost.

There is not an issue with entitlements already sold into a limited company in 2013 or earlier. In this case the limited company has the allocation right and will establish the new entitlements.

The Department is currently looking at options to either allocate the new entitlements that had been leased by the farmer to the limited company in 2014, or to allocate them directly to the farmer in 2015. Central to all of this are the tax implications which are also being examined.