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Three stock reliefs saved farmers from paying €77m in tax between 2012 and 2021, according to a new Government review of the measures.
This review found that stock reliefs only represent a “moderate exchequer cost” for every claim made and that they are efficient on the tax system.
Stock reliefs allow farmers to deduct an increase in the value of their livestock as a trade expense when calculating trading profit over an accounting period.
The value of this deduction ranges from 25% to 100%, depending on the farmer.
All three of these reliefs - general stock relief, young trained farmer stock relief and registered farm partnership stock relief - have been extended out to the end of 2025 in Tuesday’s budget.
To check out the big-ticket announcements made in Budget 2025 on Tuesday morning, click here for the Irish Farmers Journal live blog.
General relief
Any farmers who experience a rise in the value of their livestock is eligible to claim general stock relief, making it the most popular of these particular reliefs.
General farmers can avail of a 25% deduction in the increase in their stock values from profits.
The new review found that there were 13,880 farmers who successfully applied for general stock relief in 2021, around half of which were married farmers in households where both spouses were earning.
These farmers earned an average of below €40,000 that year.
Counties Cork, Tipperary and Galway were those with the most farmers availing of general stock relief, with 1,840, 1,150 and 1,120 availing of the measure in these counties alone in 2021.
The cost to Revenue of this relief increased from €5.2m in 2012 to €9.5m in 2021, a rise of 83% over that decade.
While the value of the average farmer’s claim remained broadly consistent at approximately €600 over this timeframe, the numbers seeking the relief rose by four-fifths.
Young trained farmer stock relief
An enhanced rate of stock relief is available to young farmers, which allows this group to deduct the entire value increase in their livestock over an accounting period from profit.
To qualify, the young farmer must be under 35 years of age, hold a relevant agricultural qualification, have a business plan submitted to Teagasc and be farming in their own right.
Claiming this relief is limited to the year of an individual starting out farming in their own right and the three subsequent years.
The Government review stated that two-thirds of the young farmers who benefit from the relief earn less than €40,000 and that the measure “encourages inter-generational transfer of farms”.
There were 208 young farmers who availed of this relief in 2012, but this rose to 405 by 2021, leading to an increase in its value to this cohort of farmers from €1.1m to €1.7m.
The number of young farmers availing of this relief hit a high of 530 successful applicants in 2017 and, in 2021, there was particularly strong interest from Kerry, which was the county of almost one in every three claimants.
Registered partnerships
Stock relief for registered farm partnerships also provides for an enhanced rate over general stock reliefs at a rate of 50% of the increase in livestock value over an accounting year.
In 2021, there were 360 farmers who availed of an average of just over €1,100 in relief from this measure.
The same year saw Cork, Kilkenny, Wexford and Tipperary as the counties with the most farmers availing of this relief, with respective claims of 85, 45, 45 and 40 per county.
Some 45% of the farmer who availed of this relief earned less than €40,000 in farm income.
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