The EU in Nov 2016 approved the new Farm Partnership Scheme that was announced by the Minister for Agriculture, Food and the Marine.
As and from 1St June 2017 the register is open and available for applications.
It is estimated that there are approximately 139,600 family farms in Ireland and family farming has been central to our economy for generations.
Commenting on the announcement, Declan McEvoy, Head of Tax with IFAC Accountants,
“Facing into the issue of succession can be challenging for many farming families. Understanding how and when to discuss succession, how to be fair to all members of the family and how to protect the hard work done by previous generations are central to the issue.This new scheme is designed to encourage and promote important conversations within farm families about succession planning and the transfer of farm ownership within an agreed timeframe of up to 10 years.”
Along with other benefits, the scheme will allow participants tax credits of up to €25,000 over 5 years.
Who can set up a Farm partnership?
Declan said “A farm partnership can be set up by a range of farmers from largefarm enterprises to smallfarm holdings. The average farm size in Ireland is 32.5 hectares and that’s very typical of the farms considering this scheme.
What size farm is suitable and what are the criteria?
“There are no real size limits on this particular scheme and the tax credit of €5,000 per year for 5 years and additional grants are useful incentives for young farmers who typically like to invest as they take over. Farmers considering the scheme should keep in mind that one of the conditions of the scheme is that the young farmer successor should be 37 years old or younger. This is to ensure they are registered a minimum of 3 years before they turn 40” continued Declan.
“There are a number of other criteria for the scheme that are not overlyonerous. It’s important that partnerships are registered on the register of succession farm partnerships maintained by the Department of Agriculture, Food and the Marine,” said Declan.
The new register will be open for applications from June 1, 2017.
In summary the four key criteria are:
- At least one member of the farm partnership must be farmingat least 3 hectares, for at least 2 years immediately before the date of application.
- At least one other member of the succession farm partnership must have an appropriate qualification in agriculture. They must hold an entitlement to at least 20% of the profits of the partnership and have not reached 40 years of age.
- A business plan must be completed and submitted to Teagasc.
- Both parties must enter a legally binding Succession Agreement to transfer at least 80% of the farm assets to the successor.
Where to start?
It is recommended that you take professional advice before entering into a Succession Farm Partnership agreement.If you have any queries or would like to confidentially discuss, please contact The National Tax Department on (01) 4551036or email firstname.lastname@example.org