Low income farmers granted tax break
Low income farmers granted tax break
UP to 5000 low-income farmers could be removed from Irelands tax net, following major concessions in the countrys recent annual Budget.
"The effects of a 2% reduction in the standard rate of income tax and increases in personal tax credits (allowances) will combine to lower the burden on farmers and remove significant numbers completely from liability," said Irish Farmers Association president Tom Parlon.
In addition to the personal tax reductions, farmers will benefit from more targeted changes.
For example, in the area of inheritance, the tax-free threshold has increased by 56% to Ir£300,000, while the rate of tax has been standardised at 20%.
"When taken in combination with the 90% agricultural relief, a qualifying farmer may transfer a farm worth up to Ir£3m to a son or daughter without the transferee becoming liable for tax," said a spokesman for the department of agriculture. Transfer of the family home will also be exempt.
Non-residential development land will now be subject to capital gains tax of 20% instead of 40%, as will sales of residential land to sons and daughters, putting it on the same basis as sales to third parties.
Meanwhile, the tax-free threshold for retirement relief for the over-55s is being increased to Ir£375,000, (from Ir£250,000), with 100% tax relief available for transfer of assets to a child.
The level of relief on capital investment for farmyard pollution control is increased by one-third to Ir£40,000. And stamp duty relief for the transfer of agricultural land and buildings to qualified young farmers is being extended for another three years.
While welcoming many of the measures, the IFA regretted the failure to introduce a four-year write-off period for plant and machinery investments. "Labour shortages and the need to increase productivity requires farmers to upgrade and replace machinery in a cost-effective way," said Mr Parlon. *