Tuesday’s budget was “not a bad budget overall for farming” according to head of tax with ifac Declan McEvoy, but he said there is a health warning on the details on consanguinity relief.

“Consanguinity relief, which is a stamp duty relief, the 1% rate was due to end on 31 December 2020. It’s not extended up to 31 December 2023.

“A little health warning on it, in the details of the budget they have recommended that in the 2021 Finance Bill next year, that there’ll be an upper age limit on the transferor of 67 years of age to get the 1% rate,” he told an Agricultural Science Association (ASA) Budget 2021 webinar, in association with ifac and the Irish Farmers Journal, on Tuesday night.

McEvoy said that in this budget many of the reliefs in the sector have been preserved, but said he was “fearful” for the future of those reliefs.

“I would be fearful going forward that those reliefs will come under attack, because they have to get funds somewhere going forward, but for the moment we’re positive on [the budget]. It was quite good for the farming sector."

Carbon tax

On Tuesday, the carbon tax was increased by €7.50/t to €33.50/t. The increase came into effect at midnight for road diesel.

“It’s not effective until 1 May 2021 for green diesel and home heating oil.

“It will add 1.5c/l to road diesel, 1.937c/l to green diesel. For farmers next spring when they come to fill up their tanks, a 2,000l tank will cost €38 extra to fill.

“Farmers burn a massive amount of diesel, but when you look at the contractors, there’s no relief yet for contractors. They have to carry the full burden of carbon tax and pass on to farmers,” he said.

Volatility

ASA president Dr Ann Marie Butler asked if there was anything that was missing from the budget for farmers.

McEvoy said that he was surprised there wasn’t something in the budget for farm income volatility.

"One thing I was surprised at was there wasn’t something further for volatility on farm incomes," he said.

“Considering that in the July stimulus, that it was recognised that a lot of other sectors that were hit by COVID had volatility measures brought in, carrying back losses from 2020 back to 2019, so effectively reducing the tax bill.

“In the arable sector this year, the weather was their COVID. In parts of the country, harvest was horrendous, yields were very poor.

"I’m surprised that he didn’t do something because the argument has always made ‘well we don’t have precedent’.

"This year, he had precedent to bring it into the agri sector and it’s something then that could be brought in at short notice if it was a particularly bad year."

Age limits

A question was asked as to what the upper age limit is for stamp duty relief.

“For a young trained farmer, he can be 35 on the day of the transfer and will [avail of the] 0% stamp duty rate. There is no upper limit,” McEvoy said, adding that the age of 67 is being proposed as an upper limit from the end of next year.

Another person asked if there anything specifically for young farmers in Budget 2021.

“For those who aren’t educationally qualified, that 1% stamp duty relief is very good, but outside of that there’s nothing for them in it,” McEvoy said.