A new €70,000 ceiling was introduced in the finance bill. This €70,000 ceiling is for young farmers and the ceiling extends to:
Stamp duty for young trained farmers.100% stock relief.Succession farming partnership to €5,000 credit.Up to now, these were not interdependent on each other but as and from 1 January 2019 the maximum claim that the young trained farmer can qualify for in a combination of all three is €70,000.
Why so?
The agricultural block exemption regulation allows the granting of certain categories of State aid to agriculture and forestry without prior notification to the European Commission.
One of the articles allows for startup aid for young farmers and the development of small farms.
This article states “the aid amount per young farmer shall be based on the socio-economic situation of the member concerned and shall be limited to €70,000”.
It has now been clarified that effectively there is a ceiling on the amount of grant aid.
A lifetime ceiling of €70,000 applies to the amount of grant aid for a young farmer under the regulations. This means that the amount of tax relief must be aggregated across the relevant schemes: young trained farmer stamp duty, stock relief for young farmers and succession farm partnership.
New guidance
The finance bill deals with these issues and Revenue has issued two further guidances on this:
The limits contained in the finance bill once inactive will apply to claims for relief made in relation to stamp duty from 1 January 2019 and for the year of assessment 2019 and subsequent years of assessment for stock relief and succession partnership relief. Any claimants for relief after January 2019 are advised that the three reliefs are now subject to the aggregation rules. Under that regulation, the cumulative relief applies with effect from 1 July 2014. Therefore, anyone submitting a return from 1 January next or tax returns for the 2019 year of assessment onwards must have a regard for the amount of duty claimed since 1 July 2014 and the total amount should not exceed €70,000.What to consider
This is a backward step for young farmers in that it limits the relief. However, an opportunity exists in the short term. Therefore, young farmers should consider the following:
It is only from 1 January 2019 that the three reliefs are subject to the regulation.Have you got land previously; are you about to get land?Have you claimed stock relief?Have you quantified the value of these?Were you considering transferring more in 2019?Review
Why not accelerate the review of these and look to see if you could max out the reliefs in 2018 and accelerate a transfer before 31 December 2018, if possible?
Remember, it is from 1 January 2019 that the reliefs are subject to the restriction but the look-back goes back to 2014.
An opportunity exists between now and the end of the year in relation to this.
A new €70,000 ceiling was introduced in the finance bill. This €70,000 ceiling is for young farmers and the ceiling extends to:
Stamp duty for young trained farmers.100% stock relief.Succession farming partnership to €5,000 credit.Up to now, these were not interdependent on each other but as and from 1 January 2019 the maximum claim that the young trained farmer can qualify for in a combination of all three is €70,000.
Why so?
The agricultural block exemption regulation allows the granting of certain categories of State aid to agriculture and forestry without prior notification to the European Commission.
One of the articles allows for startup aid for young farmers and the development of small farms.
This article states “the aid amount per young farmer shall be based on the socio-economic situation of the member concerned and shall be limited to €70,000”.
It has now been clarified that effectively there is a ceiling on the amount of grant aid.
A lifetime ceiling of €70,000 applies to the amount of grant aid for a young farmer under the regulations. This means that the amount of tax relief must be aggregated across the relevant schemes: young trained farmer stamp duty, stock relief for young farmers and succession farm partnership.
New guidance
The finance bill deals with these issues and Revenue has issued two further guidances on this:
The limits contained in the finance bill once inactive will apply to claims for relief made in relation to stamp duty from 1 January 2019 and for the year of assessment 2019 and subsequent years of assessment for stock relief and succession partnership relief. Any claimants for relief after January 2019 are advised that the three reliefs are now subject to the aggregation rules. Under that regulation, the cumulative relief applies with effect from 1 July 2014. Therefore, anyone submitting a return from 1 January next or tax returns for the 2019 year of assessment onwards must have a regard for the amount of duty claimed since 1 July 2014 and the total amount should not exceed €70,000.What to consider
This is a backward step for young farmers in that it limits the relief. However, an opportunity exists in the short term. Therefore, young farmers should consider the following:
It is only from 1 January 2019 that the three reliefs are subject to the regulation.Have you got land previously; are you about to get land?Have you claimed stock relief?Have you quantified the value of these?Were you considering transferring more in 2019?Review
Why not accelerate the review of these and look to see if you could max out the reliefs in 2018 and accelerate a transfer before 31 December 2018, if possible?
Remember, it is from 1 January 2019 that the reliefs are subject to the restriction but the look-back goes back to 2014.
An opportunity exists between now and the end of the year in relation to this.
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