Tax Relief

“Doable inconsistencies” within the age limits for tax breaks for farmers

For some tax breaks for young farmers that are being examined in the run-up to the 2022 budget, there are a number of “possible inconsistencies” with the age limits.

The Ministry of Finance, together with the Ministry of Agriculture, Food and Marine and Revenue, is currently reviewing these age limits for agricultural subsidies.

In a paper by the Tax Strategy Group (TSG) – an interdepartmental committee that advises the government on tax issues in advance of state budgets – it is pointed out that there may be discrepancies in the age at which a person ceases to be a “young trained farmer” is qualified “under various reliefs.

The paper gives an example where a person cannot be older than 34 years of age to qualify for the young trained farmer’s stamp tax credit while applicants for the inheritance tax credit (who are otherwise unqualified) are under the age of 40 Years in each valuation year.

However, the TSG paper also states that there may be “valid political reasons” for applying different age limits.

It added that the views of the Irish Farmers’ Association (IFA), Irish Creamery Milk Supplier’s Association (ICMSA) and Macra na Feirme have been sought and will be examined by the Treasury Department as part of the analysis of the problem before any recommendation is made Minister Paschal Donohoe brought.

Requirements for tax relief

The paper also sets out the need for clarity and simplification in listing the educational requirements required to qualify for agricultural tax relief.

In order to meet the educational criteria for qualified or trained farmer status, individuals must have a recognized or qualified qualification.

A list of such qualifications is contained in the relevant sections of certain tax laws. However, the TSG paper notes that these have not been updated in recent years and are out of date, inconsistent and difficult to find.

The lists of the educational qualifications to be applied for are “administratively complex” to keep up to date and “in practice currently largely superfluous because they have not been updated for several years,” says the paper.

Therefore, it is contemplated that Teagasc will keep a publicly available list of such suitable qualifications, including those no longer offered by colleges, with the current lists being removed from legislation.

Such a list could be updated more quickly and easily as new courses and degrees are introduced, according to the TSG.

It would also give those seeking help clarity about the relief they are entitled to based on their qualifications.

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