Farm Ireland
Independent.ie

Tuesday 22 August 2017

How to avail of a €25,000 tax break and give young farmers a helping hand

Department reveals details of new tax breaks for transfer of land to young farmers

The incentive is in the form of an annual income tax credit of €5,000 for up to five years.
The incentive is in the form of an annual income tax credit of €5,000 for up to five years.
Ciaran Moran

Ciaran Moran

The Department of Agriculture has opened its new Succession Farm Partnership initiative to encourage increased transfer of farmland to younger farmers.

Succession farm partnerships are a new income tax incentive to encourage Farmers to transfer the farm business to their identified farming Successor.

This incentive has received EU state aid approval and can be availed of for the 2017 and subsequent income tax years.

The incentive is in the form of an annual income tax credit of €5,000 for up to five years.

Under the initiative the farmland must be transferred to the identified successor within 3 to 10 years of registering with the Department of Agriculture to claim the tax credit and a minimum of 80pc of the farm assets outlined in the agreement must be transferred.

The credit is split annually based on the profit sharing ratio of the partnership between the Farmer and the Successor.

Read also: All you need to know about the new Succession farm partnerships

It applies only to partnerships that are registered on the register of succession farm partnerships maintained by the Department of Agriculture, Food and the Marine.


The new register will be open for applications from today June 1, 2017.

Existing partnerships that are registered with the Department of Agriculture, Food and the Marine can transfer to the succession farm partnership register by fulfilling the additional criteria required by the incentive.

The key criteria to be met to qualify for the income tax credit are as follows:

1. Make a valid application to be placed on the register of succession farm partnerships maintained by the Department of Agriculture, Food and the Marine.

2. At least one partner in the Succession Farm Partnership must be a natural person who has farmed at least 3 hectares in his/her own right for the two previous years. This person is defined as the “Farmer”.

3. Aside from the Farmer at 2 above, the other partner(s) must be a young trained Farmer who is in receipt of 20pc of the partnership profits. This Partner is defined as the “Successor”. The income tax credit cannot be claimed in the calendar year where the Successor reaches 40 years of age.

4. The Teagasc My Farm My Plan Booklet must be completed for the partnership. Teagasc is the certification body for this farm plan. This is freely available to download from the Teagasc website www.teagasc.ie.

5. A legally binding agreement (such as the one within, adapted to the needs of the parties), separate to the farm partnership agreement must be signed by the “Farmer” and “Successor” who are partners in the same registered farm partnership. The succession agreement must specify the year of transfer and outline the assets to be transferred. The year of transfer must be within 3 to 10 years of registering with the DAFM to claim the tax credit and a minimum of 80pc of the farm assets outlined in the agreement must be transferred.

The Department of Agriculture has said in a guidance note on the new partnerships that under succession agreement agrees to transfer farming assets including land.

It says if a person takes a transfer of land which is mortgaged or charged, the person taking the transfer (for example son/daughter) will also become liable for the mortgage/charge.


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