Stamp duty is normally charged on farm-land at a rate of 6pc of the value of the property being transferred. Other farm assets such as stock and machinery can be transferred without any charge to stamp duty.
Young Trained Farmer Relief provides an exemption from Stamp Duty for a claimant who holds a qualification in agriculture and is aged under 35 at the date of the transfer. It is also necessary that the recipient farmer, retains ownership of the farm for a period of five years and undertakes to spend at least 50pc of his/her normal working time farming the land.
There is another relief known as Consanguinity Relief which maybe available on certain transfers between blood relatives which provides for a reduced rate of 1pc.
It is also a condition of Consanguinity Relief that the beneficiary be an active farmer or lease to an active farmer, similar to the requirement for agricultural relief.
As a result of the above reliefs, it is possible to transfer a family farm with no tax charge provided all the relevant conditions are met and continue to be met for the requisite periods.
Please see here for the revenue for all relevant information on Stamp Duty
As an alternative to an outright transfer of the business, a farm partnership may be formed as a vehicle for the gradual passing of control and responsibility to the next generation.
One type of partnership is the Registered Farm Partnership which can allow access to the enhanced benefits including the benefits available to young trained farmers.
A variation of the Registered Farm Partnership has recently been introduced and is known as the Succession Farm Partnership (SFP).
Eligible persons enter into a partnership and appropriate profit-sharing agreement, making provision for the transfer of the farm to the successor within a specified period. This specified period must not be less than three years and not exceeding 10 years, thus there is a requirement that the transfer occur within this seven-year window.to a succession plan.
Most potential issues of a succession plan can be identified and addressed with timely preparation. We recommend you seek advice prior to your 55th and 66th birthdays as the passing of these dates can have tax implications.
For more information on Succession Farm Partnerships visit the Teagasc page.
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