Vol. 438 No. 5
111 Mr. Finucane asked the Minister for Finance if farmers who wish to opt for the retirement scheme and who participate in the income averaging scheme for income tax reasons will have a large income tax and stamp duty liability because of retirement and cessation for farm retirement reasons; if he will consider permitting the person to whom the land is transferred to continue with the income averaging scheme; and if he will make a statement on the matter.
Farmers opting for the early retirement scheme who have been on income averaging would be regarded as ceasing the trade of farming on the transfer of the farm. Their cases would then be reviewed by the Inspector of Taxes and they would come off income averaging and be assessed to tax under the rules relating to the cessation of a trade. The size of any tax liability would depend on the circumstances in each individual case.
The farmer taking over the farm would be assessed under the rules relating to the commencement of a trade. The farmer could elect for income averaging on taking over the farm if he had been assessed to tax in respect of the trade of farming for the previous two years.
Where the transfer of the farm is by gift, both the transferor and the transferee are accountable persons for stamp duty purposes. However, where the transfer is by way of sale, only the transferee is liable for stamp duty. The size of any stamp duty liability would depend on the circumstances in each individual case.
