This article looks at how Budget 2012 affects farmers in Ireland.
In his Budget Day speech, Mr Noonan said ‘Active ,energetic and profitable farming is fundamental to the agri-food sector.’
The main taxation changes that affects farmers and their families are:
INCOME TAX
- Stock relief of 50% (100% for certain young trained farmers) for registered farm partnerships is being introduced and will run until 31.12.15.
- A milk levy is being proposed for the New Year. This is to fund a marketing campaign to promote dairy products in preparation for the end of quotas in 2015.
- From 1st January 2012 the refund order for flat rate farmers will be extended to cover micro-generation wind turbines.
- Admission fees to pet farms will now be liable to 9% vat
- Changes to the means test for farm assist-the income disregard figure is now 15% down from 30%. The deduction from income for children is halved to €127 per year for first two children and €190.50 a year for third and subsequent children.
CAPITAL TAXES
- The rate of stamp duty applicable to the transfer of non residential property including farmland has been reduced to 2%
- Consanguinity relief will be abolished in 2014
- Capital Acquisitions Tax-this has been increased from 25% to 30%. The threshold for parent to child has been reduced to €250,000. With 90% agricultural relief the maximum tax- free transfer of property is €2.5 million.
- Capital Gains tax retirement relief-full retirement relief from CGT for intra – family transfers will be maintained for individuals aged 55 to 66. An upper limit of €3 million on retirement relief for business and farming assets disposed of within the family where an individual is over 66 years of age.
- Carbon tax- the rate of carbon tax is being increased to €20 a tonne. Farmers will be allowed a double income tax deduction to take account of increased costs
Full details of these measures will be set out in the Finance Bill