€5,000 INCENTIVE TO ENCOURAGE FARMERS TO HAND OVER FARMS

A FARM succession plan worth up to €5,000 a year is expected to encourage older farmers to more readily hand over land to their children.

Young farmers were the Department of Agriculture’s target in yesterday’s Budget 2016, which saw a new tax incentive launched and several others extended.

The Family Transfer Partnerships scheme aims to ease the handover from one generation to the next.

It will mean farmers who transfer their land to a younger family member over a specified period, can avail of a new €5,000 a year income tax credit for five years.

There has been mixed reaction among farmer interest groups over the profit-sharing arrangement.

The Irish Creamery and Milk Suppliers Association President John Comer expressed concern ‘over the possible over-complexity of the scheme’. But he committed to engaging with the Department and ensuring that ‘a positive and workable scheme’ is introduced for the farm families concerned.

Minister for Agriculture Simon Coveney was quick to allay fears, saying well over 1,000 partnerships are already in existence.

He said: ‘In simple terms this is up to a €5,000 tax credit for up to five years. I think farmers will under- stand that pretty quickly.’

Farming families could benefit to the tune of €25,000 over five years and will cost the Exchequer about €10million a year.

The total expenditure package for the Department of Agriculture will amount to over €2.5billion in 2016.

A total of €494million has been invested in the Rural Development Programme next year, up from €439million. The introduction of an

Earned Income Credit of €550 per annum for farmers and the selfemployed was also described as a ‘historic first step’ by the ICMSA.

With reduced USC rates, these changes will mean over €800 in extra net income based on average family farm income of €26,974.

The Minister added: ‘The increase in the exemption limit for USC to €13,000 will be of particular benefit to low income farm families.’