There were a number of tax changes of interest to young farmers in this week’s budget announcements.

Consanguinity relief: rolled over until 2028

Consanguinity relief on stamp duty cuts the stamp duty to 1% on transfers of agricultural land between close family relations. It saves farmers €52.5m per year.

Accelerated capital allowances: extended

Wear and tear allowances for machinery or plant are generally given over an eight-year period at an annual rate of 12.5% of the capital expenditure incurred. In the case of farm safety equipment, the rate is accelerated so the entire allowance can be claimed over a two-year period.

Combined tax reliefs: new higher limit

A new higher maximum limit of €100,000 will apply to the combined relief, accessed over a lifetime, between young trained farmer stamp duty reliefs, stock reliefs for young trained farmers and the reliefs for succession in farm partnerships.

A new combined ceiling for stock relief for farmers in a registered farm partnership of €20,000 will apply, up from €15,000 previously.

Land leasing relief: new seven-year rule

The land leasing income tax relief has been changed so that the landowners will only be eligible to avail of the income relief when the land they are leasing out has been owned for seven years.

This particular relief allows for incomes earned by leasing out land for periods of over five years to be exempt from income tax up to specified limits, which range up to €40,000 per year for leases agreed for 15 years or longer.

It is expected that the new seven-year rule will be clarified in the finance bill to be targeted at those who buy land and not anyone who has inherited land.

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