Budget's farm transfer actions will not work 'in current guise'
Changes in the Budget designed to get more young farmers in the driving seat of farm management will fall short without additional measures, according to an agricultural tax expert.
Michael Hough, of Owen Sweetman Accountants, said that the budget initiatives aimed at incentivising earlier transfer of farms to the next generation are flawed because there is no fall-back for the retiring farmers.
Currently, there is no cap on the value of a farm that is exempt from capital gains tax if it is being transferred to a family member.
However, the latest budget has proposed that this exemption will end for farmers aged 66 years or older who transfer assets worth more than €3m after January 1, 2014.
"How could a farmer that is, say, 60 years of age transfer their farm to a successor when they are still six years away from receiving a State pension?" asked the Balbriggan-based adviser.
"If a farmer transfers their farm in this scenario, it leaves them vulnerable to being without an income.
"What's really needed for this to work properly is the introduction of some kind of early retirement scheme that provides for those who opt to transfer before they reach pensionable age," added Mr Hough.