Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 2

Farming: relief for increase in stock values

Overview

This Chapter relates to stock relief which is available only to farmers and is a relief given in respect of increases in the value of farm trading stock. It is calculated by reference to the increase in value of the stock between the beginning and end of an accounting period. The relief takes the form of a deduction, to be allowed in computing the trading profits of an accounting period, of 25 per cent of the amount of the increase in value of trading stock and work-in-progress at the end of the accounting period over and above the opening value. Enhanced rates of stock relief are also provided for in certain circumstances – 100 per cent instead of the normal 25 per cent for certain young trained farmers and 50 per cent for farmers who are partners in registered farm partnerships

665 Interpretation (Chapter 2)

This section defines a number of words and terms used throughout the Chapter.

“accounting period”, in the case of a company, is determined having regard to section 27 which contains rules for establishing when an accounting period of a company begins and ends. For any other person, it means a one-year period ending on the date to which the person’s accounts are made up. Where there are no accounts or where accounts have been prepared for more or less than one year, the accounting period is determined by the Revenue Commissioners.

“chargeable period” is an accounting period (of a company) or a year of assessment (individuals).

“company” essentially means any body corporate – with certain exceptions (for example, health boards, VECs, etc).

“specified return date for the chargeable period” means, in relation to a year of assessment, the date by which the return must be made.

“trading income” means —

  • in the case of a company, its farm trading income, and
  • in any other case, a person’s farm trading profits.

“trading stock” is defined by reference to section 89, (that is, property of any description which is sold in the course of a trade or materials used in the trade).

Relevant Date: Finance Act 2019