Fears grow of hike in inheritance tax
The Budget is just five weeks away, and fears are mounting within the farm community that changes to inheritance taxes could spell disaster for young farmers attempting to take over the family farm.
"It is a widely accepted fact that increases in capital taxes will be a reality in the next Budget," confirmed the ICMSA's general secretary, Ciaran Dolan.
"The issue is to manage this change so that it doesn't cripple families attempting to transfer the family farm."
There are currently reliefs available on farm transfers that allow assets of over €3m to be transferred without any inheritance taxes kicking in.
While these limits might appear generous in an era when every conceivable revenue generating scheme is being re-examined at Government level, the following table highlights how even supposedly minor changes to the levels of relief or the rate of capital gift or acquisition taxes will have potential dire implications for families hoping to transfer the farm onto the next generation.
The table (right) shows how the transfer of a 150ac dairy farm that is well covered by all the current tax reliefs could end up leaving a young farmer with a tax liability of almost €60,000 if the agricultural relief is reduced from 90pc to 75pc and the tax rates are increased by 10pc.
The issue was raised by the ICMSA at a meeting last week with the Minister for Finance, Michael Noonan.