stock relief is good option
With the values of livestock having increased significantly over the past 12 months, it is useful to know that there is a tax relief available to farmers operating as sole traders, partnerships or through farming companies in respect of increases in stock values. This relief was due to expire last year but it has been extended until the end of 2012, subject to the signing of a Ministerial Order.
The relief is calculated as 25pc of the increase in stock values for the accounting period.
It must be claimed in writing on or before the tax return filing date. This is October 31 this year in the case of a 2010 personal tax return and nine months after the year end in the case of a corporation tax return. Stock relief cannot create or increase a loss for tax purposes. Excess capital allowances or unused losses from a prior period may not be carried forward from a period in which stock relief is claimed.
Relief for Young Trained Farmers
Enhanced stock relief of 100pc is available for a period of four years if an individual becomes a 'qualifying farmer', which means an individual who, in the period of January 1, 2007 to December 31, 2012:
- First qualifies for grant aid under the Scheme of Installation Aid for Young Farmers;
- First becomes chargeable to income tax in respect of farming profits;
- Is under 35 years of age at the start of the tax year;
- At any time during the tax year is the holder of a certificate issued by Teagasc certifying that the individual has met specific training requirements.
The specified qualifications include those awarded by FETAC, HETAC and other third-level institutions. Other courses that have been certified by Teagasc and the National Qualifications Authority of Ireland as being equivalent to these courses also qualify. Further courses qualify provided that they are supplemented by further agricultural/horticultural studies exceeding 100 hours and farm management courses exceeding 80 hours.