This has had the positive effect of tilting the scales towards there being a greater number of farmers under 35 than over 65.
Thankfully the Government had the good sense to reverse the measure.
Apart from the stamp duty debacle, Budget 2018 did not contain many measures to improve or dis-improve the lot of farmers apart from some capital tax adjustments that may benefit those farmers who have or intend to lease land for solar energy production.
However, in the interest of clarity, and God knows clarity has not been in oversupply since the Budget, I will firstly deal with the stamp duty position as it is set out in the Finance Bill.
Up until the Budget the position was that transfers of land by unrelated parties were subject to 2pc duty if the transferee did not qualify for the exemption available to young trained farmers.
However, for closely related parties where the transferor was under 67 years the rate was halved to 1pc under a provision known as Consanguinity Relief.
The problem was that Consanguinity Relief was due to end on December 31 next meaning that all farm transfers apart from those to young trained farmers would be subject to the new 6pc rate as announced in the Budget. Mercifully the Finance Bill restored the special 1pc stamp duty rate on all transfers of farming land between close relatives to the end of 2020,
Certain other conditions must still be satisfied for this relief to be available, such as the transferee (or a lessee of the transferee) farming the land for six years for at least 50pc of their normal working time where they do not hold an appropriate agricultural qualification.
A change to the rules pertaining to the 100pc exemption available for transfers of land to young trained farmers has also been included in the Finance Bill in that in compliance EU rules the applicant must submit a business plan which has to be certified by Teagasc.
SOLAR FARM RELIEF
A concern of many farmers - and one that I highlighted previously in this column about leasing land to solar energy providers - was the implications for Capital Gains Tax and Capital Acquisitions Tax (CAT) in leasing out land for this purpose.
The reality was that land taken out of farming and leased for solar energy production rendered that land ineligible for Agricultural Relief or Retirement Relief.
Thankfully, the Finance Bill addresses this matter in that it extends the definition of assets that can benefit from CGT Retirement Relief and CAT Agricultural Relief to include land that is leased on which solar panels have been installed.
Retirement relief from CGT applies when a person can make a tax free disposal to unrelated parties of certain qualifying assets up to a value of €750,000.
What the Bill sets down is that the land being disposed of will still benefit from Retirement Relief provided the area of land on which solar panels are installed does not exceed 50pc of the total area of land concerned.
The new rules will apply for disposals of leased land on or after January 1, 2018.
A similar change is being introduced in relation to Agricultural Relief which can apply in the case of Gift or Inheritance Tax collectively known as Capital Acquisitions Tax (CAT).
Agricultural Relief means that when a person receives a gift or inheritance of Agricultural Property, the market value of the property may be reduced by 90pc for the purpose of determining the amount of CAT to be paid.
One of the primary conditions of Agricultural Relief is that after receiving the gift or inheritance at least 80pc of the beneficiary's gross worth must comprise agricultural property.
Up until now land leased for the purpose of solar energy farming would not qualify as agricultural property but this has been altered in the Finance Bill.
Such land will retain its agricultural property status provided that the area of the land on which solar panels are installed does not exceed 50pc of the total area of land concerned.
Martin O'Sullivan is the author of the ACA Farmers Handbook. He is a partner in O'Sullivan Malone and Company, accountants and registered auditors; www.som.ie
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