Registered Farm Partnerships (RFPs) are a great way of succession to transfer the farm in a gradual process from one generation to the next. A partnership must compose of two people, minimum, for 5 years. A category one (a farmer who has farmed greater than three hectares for two years before the partnership) and a category two (a person with an agricultural qualification whose contribution to the partnership is a minimum of 20% of the profit-sharing agreement) applicant.
Grants and Financial Relief Available for Registered Farm Partnerships:
Maximise Low-rate Income Tax Band- Each partner may avail of the low-rate income tax band, which is currently €35,300. Collaborative Farming Grant – covers part of the legal, advisory, and financial services cost of setting up the partnership agreement. Open to all brand-new farm partnerships only. VAT is not included under this scheme. Priority is given to partnerships who have a partner who is under 40 and over 60. Payment is calculated at 50% of the VAT exclusive cost for each of the legal, advisory, and financial services included in drawing up the agreement. Maximum payment of €2,500. Scheme is operated in 6-month tranches.
Preferential Stock Relief – stock relief for young farmers (100% for first 4 years). A young, trained farmer can claim 100% stock relief on the increased stock value of his equivalent share of the farm profit. Enhanced stock relief for other partners (50%). €5,000 tax credit for first 5 years. This is divided on the same ratio as profit sharing ratio. Ltd. Companies do not qualify for tax credit. Credit can be claimed after the transfer, within 5 years.
Young Farmer Scheme – an application to the Young Farmers Scheme can be made where at least one person qualifies. This is a top-up payment obtained on a maximum of 50 activated entitlements declared on the BPS application.
Young Farmer National Reserve – a YF may apply to receive a top-up on low value entitlements or for new entitlements on lands that have no entitlements.
TAMS – The investment ceiling for TAMS is raised from €80,000 to €160,000. Where the partnership has one partner qualified as a young, trained farmer – there is 60% on the first €80,000 and 40% on the second €80,000.
Comments