Extra year's relief to plan strategy for land transfer
Farmers have been given a critical window of opportunity to transfer farms before the Government makes sweeping changes to capital taxation rules affecting land transfers.
Under the National Recovery Plan 2011-2014, changes to the Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) rates, reliefs and exemptions will not be made until 2012.
Crucially, this means that farmers who were rushing to transfer land before the December 7 Budget now have an additional 12 months to complete their strategy.
The 2012 deadline is also likely to have the knock-on effect of prompting farmers who planned to transfer assets in the coming years to bring forward the transfer to next year to avail of reliefs and exemptions while they still exist.
IFAC taxation expert Declan McEvoy said the 12-month delay would give farmers time for proper planning.
"Farmers can forget about rushing to transfer farms before December 7," he said. "That kind of rushing is lunacy. Instead they can use the added time to plan for the farm transfer next year. It's all to play for now."
The IFA's chief economist, Rowena O'Dwyer, said the 2012 deadline gave farmers some welcome breathing space for decision making.
"The fact that farmers now have all of next year to plan a farm transfer gives people more certainty," she said. "It will also mean that people can bring forward some decisions."