Budget 2015 - What Farmers Need to Know

Added: Friday, October 31, 2014

Budget 2015 – What Farmers need to know.

CGT Relief for Farm Restructuring
The Finance Act 2013 introduced CGT relief where the proceeds of sale of farm land are reinvested in another farm or farmlands. The Finance Act stipulated that the sale and purchase must occur within 24 months of each other and that the initial sale and purchase must take place before the 31st of December 2015. Budget 2015 extends this deadline for the first restructuring transaction to the 31st of December 2016.
CGT Retirement Relief
In an effort to encourage the leasing and disposal of lands by elderly farmer, Budget 2015 introduced extensions to Retirement Relief.
Retirement Relief, which provides CGT relief to individuals aged 55 or over, is being extended to allow CGT relief on disposals of leased land where the land has been leased for up to 25 years ending with the disposal (an increase from 15 years previously). This will allow individuals to lease out their land for up to 25 years prior to disposal and still be eligible for CGT retirement relief.
To encourage the movement away from conacre use, CGT retirement relief is being made available where land has been let under conacre is disposed of, or converted to long term leasing before the end of 2016.
Capital Acquisitions Tax (CAT) - Agricultural Relief
Agricultural Relief from this tax is being amended by confining the relief to beneficiaries who are “active farmers” or who lease out the property on a long term basis to active farmers. It would appear that from the 1st of January 2015 relief will only be available where the farmlands are received by active farmers. Therefore if a farmer is thinking of transferring to a son or daughter who is not an active farmer they should do prior to the 1st of January so that their son or daughter can avail of the CAT Agricultural Relief.

Stamp Duty
Most property transfers whether voluntary or for value attract stamp duty. Currently Consanguity Relief allows for a 50% reduction in the rate of stamp duty applicable to the transfer of non-residential property between family members. This relief has been extended for transfers or conveyances executed prior to the 1st of January 2018. However the extension is subject to the transferor being aged 65 or over and the transferee is an active farmer.

Please contact John Nash Solicitors with any queries you may have in transferring or selling your farmland.