AGRICULTURAL TAXES AND RELIEFS
Flat-Rate Addition for Farmers
Budget 2017 increases the flat-rate addition for farmers from 5.2% to 5.4% from 1 January 2017.
The flat-rate addition allows farmers not registered for VAT to add a flat-rate percentage to their sales of produce and agricultural services to VAT registered customers who are entitled to reclaim such VAT in their VAT returns.
The flat-rate addition allows farmers not registered for VAT to add a flat-rate percentage to their sales of produce and agricultural services to VAT registered customers who are entitled to reclaim such VAT in their VAT returns.
Bog Restoration Scheme
Under the provisions of Budget 2017, payments made under the Raised Bog Restoration Scheme will be exempt from Capital Gains tax.
Farm Restructuring Relief
Budget 2017 extends farm restructuring relief until the end of 2019. The terms of the relief, set out below, remain unchanged.
Farm restructuring relief applies to a sale, purchase or exchange in the relevant period where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes.
The initial sale, purchase or exchange must occur in the relevant period (now extended until the end of 2019) and the subsequent sale or purchase must occur within 24 months of that sale or purchase.
Full relief from capital gains tax will be given where the consideration for the purchase or the exchange of agricultural land is equal to or exceeds the consideration for the sale or the other land that is exchanged. Where the consideration for the purchase or exchange is less than the consideration for the land that is sold or the other land that is exchanged, relief will be given in the same proportion that the consideration for the land that is purchased or exchanged bears to the consideration for the land that is sold or the other land that is exchanged. A clawback of the relief is provided for where qualifying land in respect of which relief has been given is disposed of within 5 years of the date of purchase or exchange of that land. The clawback does not apply where the disposal arises under a compulsory purchase order.
Farm restructuring relief applies to a sale, purchase or exchange in the relevant period where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes.
The initial sale, purchase or exchange must occur in the relevant period (now extended until the end of 2019) and the subsequent sale or purchase must occur within 24 months of that sale or purchase.
Full relief from capital gains tax will be given where the consideration for the purchase or the exchange of agricultural land is equal to or exceeds the consideration for the sale or the other land that is exchanged. Where the consideration for the purchase or exchange is less than the consideration for the land that is sold or the other land that is exchanged, relief will be given in the same proportion that the consideration for the land that is purchased or exchanged bears to the consideration for the land that is sold or the other land that is exchanged. A clawback of the relief is provided for where qualifying land in respect of which relief has been given is disposed of within 5 years of the date of purchase or exchange of that land. The clawback does not apply where the disposal arises under a compulsory purchase order.
Income Averaging Step Out
The Income Averaging scheme allows a farmer’s taxable profit to be averaged out over a five-year period.
Budget 2017 allows farmers who have had an exceptionally poor year year to "step out" of income averaging and to pay instead the tax due on a current year basis with any deferred liability becoming liability becoming payable over subsequent years.
Budget 2017 allows farmers who have had an exceptionally poor year year to "step out" of income averaging and to pay instead the tax due on a current year basis with any deferred liability becoming liability becoming payable over subsequent years.