The Government must introduce relief from capital gains tax for farm consolidation if there is to be an increase in land mobility, according to Kilkenny IFA farm business chairman John Bambrick.
Mr Bambrick said that the Minister for Agriculture recognised that taxes must be effectively used to support the goals of land mobility, farm transfer, and investment. However, the Kilkenny man said that capital gains tax remained an obstacle to progress.
“Many farmers did not avail of the stamp duty consolidation relief that ended in June 2011,” he said.
“This was due to the fact that many farmers would have faced a large gapital gains tax bill on the disposal of their land, whether this was sold or not. This would not have been a viable option for the farm, and so farmers did not undertake the transaction.”
In its pre-Budget submission, the IFA has proposed that there must be a comprehensive set of measures to encourage land mobility – including reduction of stamp duty rates for farmland, and relief from CGT for farm consolidation transactions and for farmland sold under CPOs and subsequently replaced.
In addition, the IFA has proposed that existing reliefs for lifetime farm transfers and investment – including Agricultural Relief, CGT Retirement Relief and Capital Allowances for farm buildings – must be retained in their current form.
“The benefits to the economy of the retention of existing and the introduction of targeted taxation measures will be felt immediately and long-term through increased output, tax revenues and export earnings from the agri-food sector,” said Mr Bambrick.
