Analysis: Measures that can give you relief on new 6pc stamp duty rate rate
There have been significant changes to stamp duty in the last number of years with a large reduction in rates.
The farming sector has benefited from this in that the rate of stamp duty on the purchase of agricultural land had effectively fallen from 9pc to 2pc. With Budget 2018, the rate has now increased to 6pc.
Leasing of Farm Land
One of the recommendations at the Agri Taxation Review, intended to encourage the more productive use of farm land, was that stamp duty relief be given in relation to leases of farmland.
This was subject to a commencement order, and was never signed in as there was difficulty in collecting the data to show how much the relief would actually cost.
The stamp duty relief is a state aid to the agri-sector and therefore the cost of it must be collected. The Finance Bill 2018 now allows for the introduction of this relief as it brings in the necessary changes to allow the documentation to be put in place to collect the tax-saving data.
It will allow, subject to certain conditions, relief for stamp duty on land that is leased on the long-term basis to active farmers. The conditions must be:
- The term of the lease must be of a period of not less than six years and not more than 35.
- The land must be used exclusively for farming carried on by the lessee.
- The land must be farmed on a commercial basis with the view to the realisation of profit thus confining the relief to genuine farmers.
Revenue will accept that the lease may be to an individual, to a partnership or to a company where a named shareholder and the working director farms the land on behalf of the company.