{"id":10862,"date":"2022-04-16T12:23:46","date_gmt":"2022-04-16T12:23:46","guid":{"rendered":"http:\/\/legalblog.ie\/?p=10862"},"modified":"2024-03-31T20:33:18","modified_gmt":"2024-03-31T20:33:18","slug":"farm-restructuring-relief","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/farm-restructuring-relief\/","title":{"rendered":"Farming Reliefs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Farming\" title=\"Farming\">Farming<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Lease_Farm_Land\" title=\"Lease Farm Land\">Lease Farm Land<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Entitlements\" title=\"Entitlements\">Entitlements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Conacre\" title=\"Conacre\">Conacre<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Farm_Restructuring\" title=\"Farm Restructuring\">Farm Restructuring<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Restructuring_Relief\" title=\"Restructuring Relief\">Restructuring Relief<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Fishing_Decommissioning\" title=\"Fishing Decommissioning\">Fishing Decommissioning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Partnerships\" title=\"Partnerships\">Partnerships<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/farm-restructuring-relief\/#Energy_Letting\" title=\"Energy Letting\">Energy Letting<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Farming\"><\/span><span style=\"vertical-align: inherit;\">Farming<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Retirement\u00a0 relief applies to farming. There are further provisions which facilitate retirement from farming. See also the separate chapter.<\/p>\n<p>The relief applies to land used for farming for at least 10 years prior to transferring an interest under the European Union early retirement from farming provisions<\/p>\n<p>Single farm payment rights dispose of at the same time as land also qualify for the exemption subject to conditions.<\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Lease_Farm_Land\"><\/span><span style=\"vertical-align: inherit;\">Lease Farm Land<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"vertical-align: inherit;\">The relief may be available in respect of land that has been leased prior to its disposal. It must have been leased for not less than 25 years before the disposal and have been owned and used for farming by the person concerned for a period of 10 years prior to the leasing.<\/span><\/p>\n<p><span style=\"vertical-align: inherit;\">The disposal must be to a child. If the disposal is not to a child the relief applies of the land was there for a period of no longer than 15 years ending with the disposal and was owned and used for farming by the individual concerned for a period of not less than 10 years prior to the letting and land was leased for farming purposes to the same person for at least five consecutive years.<\/span><\/p>\n<p>The 2014 Act amendments provide that land which was previously farmed for a minimum of 10 years, which was subsequently let for up to 25 years, may qualify.\u00a0 Where there was a disposal to a third-party of leased land, each letting must be for at least five consecutive years.<\/p>\n<p>Where land is disposed of to a third-party or let for the purpose of farming during a 25 year period, each letting must be for a minimum of at least five years.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Entitlements\"><\/span>Entitlements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is\u00a0 an exemption from capital gains tax arising on disposal by farmers of payment entitlements under the single payment scheme where all entitlements are fully leased and where owners were, because of changes in CAP rules, advised by the Department to transfer their entitlements to an active farmer before 15 May 2014.<\/p>\n<p>The disposals in the scheme year of entitlements together with land on which the eligibility arises that have been fully leased in the scheme year 2013 are exempt from capital gains tax.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Conacre\"><\/span>Conacre<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"vertical-align: inherit;\">Where farmers have left land on conacre (periodical licences) a disposal\u00a0 may qualify for relief in the context of retirement prior to 2017 subject to certain conditions. The land must have been owned and farmed by the person concerned for at least 10 years prior to the leasing or letting on conacre.<\/span><\/p>\n<p>Land currently let under conacre which end with disposal to a third-party before the end of 2016 or which is leased out for minimum periods of five years to a maximum of 25 years ending with a disposal also qualified for capital gains tax relief.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Farm_Restructuring\"><\/span>Farm Restructuring<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is relief from capital gains tax \u00a0to incentivise farm restructuring. The purpose of farm restructuring is toimprove the operation and viability of the farm. It may involve by selling and purchasing or exchanging parcels of land to bring them closer together. A parcel of land is an entire agricultural field or group of fields used for farming purposes.<\/p>\n<p>The relief provides:<\/p>\n<ul>\n<li>full relief from CGT when the purchase price exceeds the sales price<\/li>\n<li>partial relief on CGT when the purchase price is lower than the sale price. (Relief is given in proportion to the amount of the sale proceeds reinvested in purchasing a new parcel of farm land.)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Restructuring_Relief\"><\/span>Restructuring Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The first sale or purchase must occur between 1 January 2013 and 31 December 2022. The next sale or purchase must occur within 24 months of the first. It also applies to exchanges.<\/p>\n<p class=\"callout-content\">The sale and purchase or exchange must result in a reduction in the distance between parcels of land.\u00a0This includes land that has been leased for at least two years with a minimum of five years to run. There must be a Farm Restructuring Certificate\u00a0issued by Teagasc. This certificate must state that you carried out the transaction for farm restructuring purposes.<\/p>\n<p>Relief is given at the time of the:<\/p>\n<ul>\n<li>sale of the land, if the purchase takes place\u00a0before\u00a0the sale<\/li>\n<li>exchange, where land is exchanged simultaneously.<\/li>\n<\/ul>\n<p>A farmer may sell a parcel of land and pay CGT before purchase of a new parcel land. He may claim a refund when the purchase of a new parcel of land takes place.<\/p>\n<p>There is a clawback if there is a disposal of\u00a0 land purchased or exchanged within five years of the date of purchase or exchange. This does not apply to a sale of the land under a compulsory purchase order.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Fishing_Decommissioning\"><\/span>Fishing Decommissioning<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The relief applies to compensation paid to certain fishermen arising from decommissioning of fishing vessels under certain schemes promoted by the Department of Agriculture.<\/p>\n<p>The person disposing of the vessel must have owned and used the vessel for a period of six years before that time and be at least 45 years of age at the time the restless disposed of.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Partnerships\"><\/span>Partnerships<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"vertical-align: inherit;\">Farming partnership is one which carries on the trade of farming. Relief was available for assets disposed of which have been held by the family partnership for 10 years prior to its dissolution. Where it is acquired by inheritance the period of ownership of the predecessor is included. The relief ceased at the end of 2013.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Energy_Letting\"><\/span>Energy Letting<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"vertical-align: inherit;\">The Finance Act 2017 provides that the leasing of agricultural land for solar energy production does not affect entitlement to the relief where 50 percent or less of the total area of the leased land was used for this purpose. The provision applies to disposals <\/span><span style=\"vertical-align: inherit;\">after 1 <\/span><span style=\"vertical-align: inherit;\">January 2018.<\/span><\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10862\" data-postid=\"10862\" class=\"themify_builder_content themify_builder_content-10862 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Farming Retirement\u00a0 relief applies to farming. There are further provisions which facilitate retirement from farming. See also the separate chapter. The relief applies to land used for farming for at least 10 years prior to transferring an interest under the European Union early retirement from farming provisions Single farm payment rights dispose of at the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[420],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10862"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10862"}],"version-history":[{"count":6,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10862\/revisions"}],"predecessor-version":[{"id":10983,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10862\/revisions\/10983"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}