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Written Answers - Tax Code

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 27.  Deputy Brian Stanley Information on Brian Stanley Zoom on Brian Stanley  asked the Minister for Agriculture, Food and the Marine Information on Simon Coveney Zoom on Simon Coveney  his plans to increase financial support for start-up farmers; and if he will make a statement on the matter. [7068/12]

Minister for Agriculture, Food and the Marine (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney In addition to the range of measures already available number of new measures are being implemented to assist younger farmers as part of a budget 2012. These include:

1. A new stock relief incentive to encourage farm partnerships. An enhanced 50% stock relief will be available for all registered farm partnerships, and a 100% stock relief will be available for certain young trained farmers forming such partnerships. Subject to EU State Aid approval, this new incentive will be available until December 2015.

[110]2. Reducing the stamp duty rate on agricultural land from 6% to 2%. A half rate (1%) will be applicable to transfers to close relatives until the end of 2014. This change will substantially reduce the stamp duty payable on transfers of farm land by gift or by sale. It should stimulate a stagnant land market — currently only 0.5% of total agricultural land is offered for sale annually. It will also promote inter-generational transfer, with the cost of lifetime transfer to transferees who do not qualify for the young trained farmer stamp duty relief reduced considerably.

3. Restructuring of the retirement relief on Capital Gains Tax to incentivise the earlier transfer of farm assets to the next generation, and to encourage the sale of land by those farmers with no successors. These changes will apply from 2014 onwards, thereby allowing time for older farmers to plan for transfer. These changes will aid land mobility and improve the age profile of Irish farmers.

4. The VAT rate applied to open farms will be 9% rather than the new standard rate of 23%. This will be of significant benefit to such farms, which offer an important opportunity for farm diversification. It brings the treatment of open farms into line with the VAT rate applied to museums and other cultural attractions.

5. A Capital Gains Tax incentive for property purchased before the end of 2013 should also stimulate the land market. A property bought during this period and held for at least seven years will be relieved from Capital Gains Tax.

6. Consistent with the commitment in the Programme for Government on carbon tax, farmers will be allowed a double income tax deduction in respect of the increased costs arising from the change in carbon tax (the carbon tax is to increase from €15 per tonne to €20 per tonne).

7. An amendment to the VAT refund order for farm construction will allow farmers to claim a refund on wind turbines purchased from 1 January 2012.

The tax changes in Budget 2012 encourage partnership formation and incentivise inter-generational land transfer. I believe they will be of real benefit to farmers and the economy generally.

There are also proposals at a European level to give additional payments to younger farmers, which will greatly help them to start up or increase their production.

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