Dáil Éireann Debate, Thursday - 8 November 2018
52. Deputy Charlie McConalogue asked the Minister for Finance his views on the issues raised by a farming organisation (details supplied) regarding the cumulative lifetime cap of €70,000 on the amount of tax relief that can be availed by young farmers as proposed in the Finance Bill 2018. [46453/18]
View answerFinance Bill 2018 (as published) provides in sections 19 and 46 for a cumulative €70,000 lifetime cap on the benefit any one farmer can receive under three farming related tax reliefs (the young trained farmer stamp duty relief, stock relief for young trained farmers and succession farm partnerships).
I am aware of the concerns raised by the farming bodies that have contacted me or my Department on this matter.
The origin of the €70,000 cap lies in EU law.
The following tax or stamp duty relief schemes come within article 18 of Commission Regulation (EU) No 702/2014 of 25 June 2014 "declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union ":
- section 81AA of the Stamp Duty Consolidation Act 1999 (which provides a stamp duty exemption for transfers of land to young trained farmers);
- section 667B of the Taxes Consolidation Act 1997 (which provides an income tax relief in respect of increases in the value of farm trading stock).
- section 667D TCA 1997 (which provides an annual tax credit of up to €5,000 for succession farm partnerships where an approved partnership culminates in the transfer of at least 80% of the farm assets from the original farmer to the successor).
The EU Regulation came into effect on 1 July 2014. Article 18 applies the state aid rules in relation to start-up aid for young farmers and the development of farms. Paragraph (7) of the article provides that “the aid amount per young farmer shall be based on the socioeconomic situation of the Member State concerned and shall be limited to EUR 70 000”. This means that the maximum aid amount allowed under the three schemes is €70,000 per each farmer who qualifies for the relief.
EU state aid regulations are legal acts that have direct effect in all EU countries and can be enforced directly by the European Commission regardless of domestic Irish law. Ireland does not, therefore, have the power to vary the limit. Introducing the cumulative €70,000 limit in national legislation is designed to provide clarity on how the limit applies in relation to the three reliefs.
The €70,000 limit has therefore been included in the relevant tax and stamp duty sections in Finance Bill 2018. Queries on the application of the cap should be directed to Revenue who are best placed to provide any operational information that may be required.
