Dáil Éireann Debate, Tuesday - 5 October 2021
196. Deputy Matt Carthy asked the Minister for Finance the estimated cost of extending the succession tax credit to off-farm income on the basis of tax returns in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48080/21]
View answer197. Deputy Matt Carthy asked the Minister for Finance the number of persons that availed of the succession tax credit in each of the years 2016 to 2020 and to date in 2021; and if he will make a statement on the matter. [48081/21]
View answer198. Deputy Matt Carthy asked the Minister for Finance the percentage of farm assets that a transfer or must agree to transfer to the successor for the successor to avail of the succession tax credit; and if he will make a statement on the matter. [48082/21]
View answerI propose to take Questions Nos. 196 to 198, inclusive, together.
The succession farm partnership scheme is a joint initiative between my Department and the Department of Agriculture, Food and the Marine, designed to encourage an older farmer to form a partnership with a young trained farmer, with a view to transferring management of the farm and ultimately ownership of the farm. The use of a partnership model, rather than an upfront outright sale, allows for the transfer of knowledge from the older farmer to the younger farmer in advance of the transfer of ownership of the land.
The primary participant in a registered farm partnership should apply to the Minister for Agriculture, Food and the Marine to enter the partnership on the register of succession farm partnerships. To be entered on the register of succession farm partnerships, a registered farm partnership must comply with certain conditions.
Firstly, in relation to the estimated cost of extending the succession tax credit to off-farm income, I am advised by Revenue that this tax credit may already be offset against a taxpayer’s overall tax liability.
Further, I am advised by Revenue that the annual costs of the tax credit for succession farm partnerships are available on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf. The tax credit came into operation in 2017 and the latest year for which data are available is 2018.
The following table sets out the numbers of participants and the associated Exchequer cost for 2018 and 2017:
|
- |
2018 |
2017 |
|
No. of participants |
290 |
175 |
|
Cost (€m) |
0.6 |
0.4 |
Finally, one of the conditions of the scheme is that the farmer must enter into an agreement to transfer at least 80% of the farm assets to which the farm partnership applies to the successor (or successors) at some point in the period beginning 3 years after and ending 10 years from the date on which the application to enter the partnership on the register is made. The terms of the agreement must include the farm assets of the farm partnership on the day the application is made, the year in which the proposed transfer will take place, any conditions to which the transfer or sale will be subject, and any other terms agreed between the farmer and the successor (or successors).
For the year of assessment in which the partnership is registered as a succession farm partnership and the four years of assessment immediately following that, each partner will be entitled to a succession tax credit of the lesser amount of:
- €5,000 per year of assessment divided between the partners in accordance with their profit-sharing ratio, and
- the assessable profits arising to the partner from the succession farm partnership.
