It was reassuring to see that the minister did not introduce any measures that will further disadvantage agriculture in light of the uncertainties faced over Brexit. However, aside from the relaxation of the rules on income averaging, there were no changes that will significantly benefit the sector.

The removal of the restriction on income averaging for farmers generating income from other sources was a welcome announcement. It was disappointing, however, that no additional measures were announced to provide a more targeted and individualised income volatility measure.

Farm organisations have been lobbying for a number of years for the introduction of a deposit-type scheme which would allow farmers to set aside an element of profits in a good year and draw down those funds in a difficult year, with tax being paid only when the funds are drawn down. Such schemes are already in place in a number of countries and it was disappointing that a similar scheme was not introduced here, particularly after the very difficult year suffered by many farmers.

Stock relief

Stock relief has for years been an important incentive to farmers to increase their investment in stock.

Therefore, extending the general 25% stock relief, 50% stock relief for registered farm partnerships and the 100% stock relief for certain young trained farmers for three years was a welcome move.

Changing the legislation to introduce stock relief on a permanent basis will hopefully now be on the agenda.

Transfers and succession

There were no changes to tax incentive measures to encourage farm transfers and succession other than the extension of the exemption from stamp duty for young trained farmers for another three years.

It was disappointing that agricultural property was not removed from the definition of commercial property which is now subject to stamp duty at 6%. This puts those who wish to acquire additional land to expand his/her farm but who cannot avail of the stamp duty relief for young trained farmers at a disadvantage.

Also, there was no reduction in the Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) rates of 33% and there was only a modest increase of €10,000 in the exemption threshold for gifts from parent to child.

Self-employed

For self-employed individuals (including farmers) the main change was the increase in the earned income credit, which rose to €1,350.

There was no reduction though in the 3% additional USC charge for self-employed individuals earning over €100,000. This additional charge does not apply to employees who earn over €100,000 and is an unfair additional tax burden for self-employed individuals.

Companies

For farmers that operate through companies, the minister’s speech contained no changes. The 12.5% corporation tax rate on trading profits and the 25% tax rate on unearned income such as deposit interest, co-op dividends, etc. have not changed.

Fair Deal

It was widely anticipated that the minister would announce changes to the Fair Deal scheme to preclude farm assets from the financial assessment in determining the contributions to be made by the older person.

However, this was not mentioned. Hopefully such a measure might be included in the Finance Bill that is due to be published.

Brexit

The risk of a no-deal Brexit presents a clear threat to the competitiveness of Irish exports, with the potential to undermine the viability of many small businesses.

This led to the minister announcing the launch of a future growth loan scheme for small and medium sized enterprises (SMEs) and the agriculture and food sector worth €300 million. SMEs provide most of the country’s employment and additional government support for this sector is crucial in preparing for Brexit.

Low-cost loans

Minister for Agriculture Michael Creed also confirmed that the long-awaited low cost loan scheme that was announced in Budget 2018 will finally be available at the start of 2019. This scheme should provide access to funding to facilitate the capital investments required to achieve the targets for expansion set out in the Food Wise 2025 strategy.

Conclusion

Like all taxpayers, farmers will benefit from the modest tax changes that were announced . In addition, the proposed loan funds to help prepare for Brexit are very welcome. But, with the economy doing so well, it is disappointing that the Minister did not avail of the opportunity to do more than just tinker with tax rates and credits.