Uncertainty over future of Young Farmers Scheme
The Young Farmers Scheme, National Reserve and Basic Payment Scheme are all due to open for applications next week.

The Young Farmers Scheme (YFS) and National Reserve are both due to open for applications in the next week, according to Eddie Forde of the YFS section of the Department of Agriculture.

This will be in line with the opening of the Basic Payment Scheme.

He was speaking at an Agricultural Consultants Association (ACA) environmental training day held in the Midlands Park Hotel, Portlaoise, on Thursday 7 February.

The YFS was first opened for applications in 2014 and at that point was due to run until 2019.

Uncertainty

However, according to Forde, there is uncertainty over whether it will continue going into 2020. “There is a lot of discussion currently going on to see if it [the scheme] will roll over. Right now, the Department does not know yet.”

He continued: “I don’t know where things will go but there is speculation that schemes will roll over [into 2020].”

As per the terms of the scheme, a young farmer is eligible to receive payments for five years through the scheme. First-time applicants must have started farming since 1 January 2014.

The educational requirements remain the same with a young farmer having to complete a Fetac Level 6, or higher, by 15 May 2019.

In 2018, the scheme was worth approximately €68/ha to successful applicants.

National Reserve

Funding of €3m has been allocated to the National Reserve for 2019.

The priority for the National Reserve will again be for young farmers and new entrants. To be eligible for the scheme as a new entrant, the young farmer must have begun farming in the 2017 calendar year or any later year.

A young farmer is eligible as a new entrant if they have not farmed in the past five years, even if they have farmed before this.

However, they must still comply with the other terms and conditions.

Farm Finance: four weeks left for BPS application
The deadline for submitting the Basic Payment Scheme application is 15 May.

Four weeks left for BPS application

Farmers need to be aware that the deadline for the Basic Payment Scheme (BPS) online application is 15 May 2019. It is an extremely important part of the majority of farmer’s income and if at all possible should not be left to the last minute. Farmers can make the application themselves or through an agent. This is also the deadline for the Areas of Natural Constraint (ANC) scheme, Young Farmers Scheme, transfer of entitlements and National Reserve applications. The Department is assisting farmers via one-to-one clinics country-wide. Details are available on farmersjournal.ie.

Fram Finance: land leasing income tax exemptions explained
Austin Finn from the Land Mobility Service answers some common questions we have received recently when it comes to income tax exemptions for long-term leases.

Last week in this publication, we ran an article on the points to consider if leasing out farmland. We received a number of queries regarding the tax exemptions available to landowners considering leasing out their farms.

Austin Finn from the Land Mobility Service took the time to answer the two most common questions in more detail.

Q: How do the tax exemptions work if you have a number of different leases with different term lengths? What if you owned the land jointly with your spouse?

A: The thresholds for income tax exemption for long-term five-plus-year leases taken out on or after 1 January 2015 are:

  • €18,000 where all the qualifying leases are for five or six years.
  • €22,500 where all the qualifying leases are for seven but less than 10 years.
  • €30,000 where all the qualifying leases are for 10 but less than 15 years.
  • €40,000 where all the qualifying leases are for 15 years or more.
  • The income tax reliefs are per land owner, they are annual and certain conditions must be met for a lease to qualify.

    If a land owner has a number of different leases, the exemptions and lease values are cumulative.

    If an owner has three seven-year qualifying leases with different farmers and the combined lease values of the three leases is €22,000 per year, the full € 22,000 is exempt from income tax.

    However, if the combined annual lease value is €24,000, the annual income tax exemption is capped at €22,500.

    The annual income tax relief is per land owner, so if land is jointly owned (two land owners), the thresholds are doubled.

    A retiring farming couple who jointly own the farm could receive up to €80,000 per year income tax-free, should they enter into a qualifying 15-year lease.

    Q: I am thinking about retiring from farming and am really considering leasing my land to another farmer long term to avail of the income tax exemptions. My only concern is if I transfer the land to my children in the future, will they have a large tax bill to pay because we are no longer farming the land?

    A: Entering into a long-term lease does not affect the capital tax reliefs available to farmers.

    The two main capital taxes to consider when transferring or disposing of a farm are capital gains tax (CGT) and capital acquisitions tax (CAT).

    CGT can apply to the disposer should a land owner decide to sell or transfer his/her farm during his/her lifetime.

    Any land owner over the age of 55 who has farmed the land for at least 10 years qualifies for CGT retirement relief – they can have leased the land for up to 25 years subsequent to the 10 years farming and still qualify for this relief.

    CAT is payable by the recipient of the farm (farm land, farm assets, agricultural assets).

    The most important relief for any recipient of an agricultural asset to try to avail of is CAT agricultural relief. To secure this relief, the recipient must satisfy an 80% asset test. This means that upon receipt of the asset, 80% of their assets are agricultural.

    To hold this relief the recipient must either actively farm themselves for six years or lease the farm to an active farmer for six years or a combination of both.

    The definition of active farming in this regard is to demonstrate 20 hours per week work on the farm. If the person has a Green Cert, there is no requirement to be able to prove hours worked.

    If a person qualifies for this relief, the value of the asset transferred is reduced by 90% for CAT purposes, with this reduced value and the available tax-free threshold (currently €320,000 parent to child cumulative) no CAT should apply.

    Whether or not the farm is leased prior to the transfer does not affect CAT agricultural relief.

    In fact, having a qualifying lease in place can help, especially for non-farming recipients, as extending the lease for up to six years post-receipt helps them qualify for the CAT agricultural relief.

    Environment: silage plastic recycling
    Bring centres to accommodate the recycling of farm plastics will be available in different locations nationwide starting this weekend until the end of summer.

    Silage plastic bring centres will be open for business from this weekend. The bring centres are one- or two-day events organised by the Irish Farm Film Producer Group (IFFPG).

    A full list of the locations and timing of these bring centres is available on the IFFPG website. The first bring centres will open this weekend, starting in Kilmallock Mart in Limerick on Friday and Saturday.

    There will be approximately 235 bring centres opened for recycling between now and the end of August.

    Charges for the recycling service vary depending on if you have a six-digit label code or not. The label shows proof of purchase from an IFFPG plastic producer member and is given to the farmer when he purchases the wrap. The charge for recycling 0.5t of plastic (approximately 250 wraps, three covers) is €20 for farmers with a code or €85 for farmers without a code.

    The bring centres also accommodate other categories of used farm plastics in association with REPAK. Plastics such as net wrap, small and large fertiliser bags, meal bags and drums are covered.

    All these other categories can be brought to the centres and should be segregated in bulk fertiliser bags with the liners removed.

    Disposal cost for the majority of other categories is €10 per bag. Netting and twine recycling costs €5/bag.

    Farm collection

    Farmers also have the option of getting plastic collected from their farm. Collections can be booked online on the IFFPG website.

    This service costs more, but it may suit some farmers who do not have ways of transporting the plastic or cannot travel to a bring centre.

    The cost of recycling via on-farm collection for 0.5t of plastic (approximately 250 wraps, three covers) is €45 for farmers with a code or €100 for farmers without a code.

    Presentation

    Farmers are encouraged to present the silage plastic in a clean and dry state if possible.

    When paying by weight, it makes sense to reduce the moisture on the plastic that can add to the weight and, in turn, costs.