Budgetary priority for farmers
÷ extension of the exemption from stamp duty for young trained farmers which is due to expire at the end of 2018; ÷a reduction in the current CGT and CAT rates of 33pc, and an increase in the exemption threshold for gifts from a parent to a child (€310,000). Any changes in these areas would be made in the context of a package of tax changes generally and would benefit all taxpayers. But they would also be helpful as an incentive to encourage the transfer of family farm enterprises to the next generation.
÷ a review of the rules relating to the reliefs for Succession Farm Partnerships would be welcome — the uptake on this relief appears to have been relatively small which suggests that some tweaking of the rules is needed.
But there is more to the Budget than tax changes. The risk of a no-deal Brexit is looming and presents a clear threat to the competitiveness of Irish agricultural exports, with the potential to under- mine the viability of many small businesses. Access to affordable lending is critical to the agri-sector to help manage this threat.
Access to such lending will also be critical to facilitating the ongoing working capital requirements and capital investments that will be necessary to achieve the targets for expansion of the agri-sector that are set out in the Food Wise 2025 strategy.
Some €25m was allocated in Budget 2018 in order to set up a new low-cost loan scheme for farmers. Last week, Minister Creed confirmed that this low-cost loan scheme will be available at the start of 2019. This is long awaited, but should provide access to funding to help address both of these issues.
However, this scheme will not address the severe cashflow pressure that many family farms are currently facing as the low-cost loan scheme is restricted to expenditure for capital purposes only.
Following the difficulties caused by the extreme weather conditions over the last 12 months, there is an urgent need for access to short-term funding for non-capital expenditure.
Overall, it is essential that any changes announced in today’s Budget do not impact on the future expansion required in the agri-sector and does not put undue additional financial pressure on those working in this sector.
IT’S ESSENTIAL ANY CHANGES ANNOUNCED DO NOT IMPACT ON THE EXPANSION OF THE SECTOR
Jim McCleane is Tax Director with PwC Mid-West Practice