Part-time farmers must not be discriminated against


The recent much-acclaimed budget measures to entice older farmers to lease their holdings to younger farmers long-term by way of tax reliefs may have an unintended and serious consequence for commercial part-time farmers, according to Deputy Paul Connaughton.
Deputy Connaughton said this week he had received numerous requests from worried commercial part-time farmers concerning a proposal to define a farmer within the meaning of the Act as a person who ‘actively farms at least 50% of his or her time on the land’ in order to qualify for inheritance and gift tax relief. This relief, which currently operates as a 90% reduction in the value of the land being transferred, is of huge benefit to all farmers. From the 1st January 2015 this will change quite dramatically.
‘Currently neither the person handing over the land nor the person receiving it needs to be active farmers to qualify for this relief. However, from the 1st January 2015, in addition to existing qualifying conditions, only two particular groups will be eligible. The relief will only apply on agricultural properties gifted to or inherited by active farmers or to individuals who are not active farmers themselves but who immediately lease out their land on a long-term basis (over six years) for agricultural use to an active farmer.’
Deputy Connaughton said that if this definition becomes law, many serious commercial part-time farmers will never be able to transfer their holdings to their sons or daughters as the inheritance or gift tax will financially crucify them.
‘Similarly a second problem may arise with stamp duty. Currently in inter-family transfers, when the person getting the land has the appropriate agricultural education and is under 35 years of age, the stamp duty is reduced from two percent to one percent. This will remain in place up to 31st December 2017 but with two major changes. The retiring farmers must be under 65 on 31st December 2014 and the person getting the land must be an active farmer.’
Deputy Connaughton said the definition of an active farmer must take into account part-time farmers who, if young enough, will have received the relevant agricultural education, such as the Green Certificate in Agriculture and who are farming the land irrespective of how many hours they work off-farm.
‘Many such families get huge help from their wives and partners and from their own families and this must be taken into account. The Budget made great strides to get land into the hands of people who can commercially work such lands, particularly through long-term leasing, but if it becomes a reality, particularly in the west of Ireland, where over 60% of all farmers are part-time, there will be large tracts of land that will not be transferred as it would financially ruin small farmers.’
Deputy Connaughton said he didn’t like the idea of a two-tier approach to farm transfers. ‘Most of the part-time farmers I know are good farmers, but because of the limited acreage they have, cannot make a living from the land without an outside job of some sort. There should be no discrimination between full-time and part-time farmers. If small farmers’ sons and daughters have the required agricultural education they should not be treated differently,’ concluded Deputy Connaughton.