Changes to entitlement values under the new CAP Strategic Plan and an amnesty on the clawback of entitlements traded without lands are reported as giving rise to more considerations of selling entitlements.

Tax implications also need to be considered.

When you sell entitlements, capital gains tax (CGT) is payable on any gain you make. The current rate of CGT is 33%; however, you may be able to reduce your liability if you qualify for certain tax reliefs.

Base cost

To calculate whether you have made a gain on your entitlements, you need to deduct the acquisition cost from the sale proceeds. If you have held your entitlements since 2005 (the basis year), the base cost is zero, as you did not pay anything to acquire them.

However, if you purchased your entitlements since the introduction of the Basic Payment Scheme (BPS) in 2015, the base cost will be whatever you paid for them at the time. Likewise, if you have inherited or received a gift of entitlements since the introduction of BPS, the base cost will be the value that was put on them for gift and inheritance tax purposes at the time.

Allowable loss

While the base cost of entitlements purchased, inherited or received by way of a gift in the period between 2005 up to the introduction of BPS in 2015 is zero, you may have an allowable loss to offset against any gain that you make when selling your entitlements. This is because, on the introduction of BPS in 2015, farmers were deemed to have disposed of their Single Farm Payment entitlements for no consideration.


Where you have made a gain on your entitlements, you may be able to reduce your CGT liability if you qualify for either revised entrepreneur relief or retirement relief.

Revised entrepreneur relief: If you are currently farming – and have been farming for at least three years – and have owned the entitlements during this period, then you may qualify for revised entrepreneur relief. This reduces the CGT rate from 33% to 10%. Note, however, that if you leased the entitlements prior to selling them, you cannot avail of this relief.

Retirement relief: If you are over the age of 55 and are selling the entitlements with land, you may qualify for retirement relief, which could potentially eliminate your CGT liability.


Where the proceeds from the sale of entitlements are €37,500, or more, in any 12-month period, the transaction is liable to VAT at 23%. If you are not VAT registered, it is important to be aware that you will need to register, charge VAT and pay this over to Revenue. Note that if the entitlements are sold with land, relief from VAT may apply.

Example 1: John inherited entitlements along with the farm worth €40,000 in 2010. He sells them for €35,000. As he has a loss of €40,000 on the change from SFP to BPS in 2015 he can use this loss to offset against his gain of €35,000. No tax is payable in this scenario.

Example 2: John has been farming since the 1990s and established the entitlements. He sells the entitlements for €50,000. He has a gain of €50,000 and no base cost so CGT of 33% is payable on this.

Example 3: Following on from example 2, If John had been farming with the entitlements since acquisition but is not selling land with the entitlements, he would be able to avail of the 10% CGT rate but he would also have to register and charge VAT of €11,500 on the sale.

Seek advice

Always seek tax advice prior to selling to check whether you meet the conditions for any of the available reliefs.