Dáil Éireann Debate, Thursday - 29 September 2016
14. Deputy Brendan Griffin asked the Minister for Finance if he will consider a farm management deposit scheme, as proposed by the Irish Creamery Milk Suppliers Association, ICMSA; and if he will make a statement on the matter. [27532/16]
Amharc ar fhreagraA comprehensive review of tax measures in the farming sector was announced in Budget 2014, as a joint initiative between the Department of Finance and the Department of Agriculture, Food and the Marine. The review focused on three key policy objectives for agri-taxation policy, including: increasing mobility and productive use of land; assisting succession; and complementing wider agriculture policies and schemes, such as supporting investment to enhance competitiveness, environmental sustainability, alternative farming models such as farm partnerships and responses to increasing income volatility.
Following on from this review, a significant number of measures were introduced, retained or refocused in the last two Finance Acts. These formed a comprehensive tax package to support the farming sector, including but not limited to: extension of income averaging from 3 to 5 years; broadening of CGT retirement relief so that, for example, individuals can now lease out their land for up to 25 years prior to disposal and still be eligible for CGT retirement relief; extension of stamp duty relief for non-residential land transfers between certain close relatives; extension of general stock relief, stock relief for certain young trained farmers and stock relief for registered farm partnerships; and extension of the stamp duty exemption for young trained farmers.
In addition, a new "succession transfer partnership" proposal was introduced in Finance Act 2015.
A public consultation was held as part of the agri-tax review. Proposals put forward from this consultation were considered and a number of meetings were held with stakeholders, including the ICMSA. A number of respondents suggested a tax deposit scheme similar to the farm management deposit scheme put forward by the ICMSA. Such a scheme is essentially a tax deferral scheme, where farmers lodge money tax free and pay tax on withdrawal after a number of years. The idea is based on similar schemes in Australia and New Zealand, which are not subject to EU State Aid rules and which do not have a system of direct payments.
The Agri-tax working group concluded that a scheme such as this would not be compatible with EU State Aid rules which preclude supports to falling farm incomes arising from low commodity prices in the market place.
Accordingly, it would not be possible to introduce such a scheme.
