Revenue Note for Guidance
This section provides stock relief generally at the rate of 50% for farmers who are partners in registered farm partnerships and 100% for certain “qualifying farmers” within the meaning of section 667B (often referred to as young trained farmers), who are partners in such partnerships. It applies to accounting periods which commence on or after 1 January 2012 and which end on or before 31 December 2021.
This relief is subject to a maximum limit.
Sections 666 and 667B continue to apply to farmers who are not partners in registered farm partnerships.
“common agricultural payments” means any payment arising directly to a partner under the Common Agricultural Policy.
“excluded farm asset” means farm land or livestock or machinery used for a farming activity left out of the partnership by the terms of the partnership agreement, but cannot include beef, dairy or sheep farming.
“farm asset” means all farm land, entitlement to common agricultural payments and assets used for farming, but does not include excluded farm assets or farm land which is to be disposed of to an authority possessing compulsory purchase powers.
“farm land” means land in the State and includes a building situated on that land, other than buildings or parts of a building used as dwellings, occupied by a partner for the purpose of farming the land.
“Minister” means Minister for Agriculture, Food and the Marine.
“non-active partner” means, in the case of an individual, a person who spends not more than an average of at least 10 hours per week engaged in the activities of the several trade of the partnership during the accounting period or in the case of a company, a company whose officers and employees between them spend an average of not more than 10 hours per week engaged in the activities of the several trade during the accounting period.
“partner” means a person who is a partner in a registered farm partnership.
“primary participant” means the precedent partner, within the meaning of section 1007.
“Qualifying farmer” has the meaning assigned to it by section 667B.
“register” means the register of farm partnerships established and maintained by the Minister under and in accordance with this section and the regulations under subsection (4A).
“register of succession farm partnerships” shall be construed in accordance with section 667D(1).
“Registered Farm Partnership,” means a farm partnership entered on the register.“several trade” has the meaning given to it by section 1008.
In order to be placed on the register, a farm partnership must satisfy the following conditions:
The primary participant must notify the Minister of any change to the partnership within 21 days of the change. Failure of the primary participant to do so may result in the partnership being removed from the register from the date of the change, unless:
The primary participant must notify the Minister prior to a new partner joining or an existing partner ceasing to be a partner and shall request the Minister to amend the relevant entry on the register accordingly. The Minister shall not approve such an alteration unless the Minister is satisfied that it is for bona fide commercial purposes.
A farm partnership which is formed between a farmer and a company of which that farmer is a director or has a shareholding, shall not be eligible to be a registered farm partnership.
The Minister shall only enter a partnership on the register if he/she is satisfied that the farm partnership has met the conditions set out in subsection (1A). If the Minister is not satisfied that the partnership is continuing to meet those conditions, the partnership shall be removed from the register with effect from the date it ceased to meet those conditions. A farm partnership may be suspended where an order has been made under section 9 of the Animal Health and Welfare Act 2013
This subsection, which is subject to subsection (3), amends a number of the provisions in section 666 for the purpose of this section. Section 666 provides for stock relief at the rate of 25% for farmers, other than certain qualifying farmers.
Firstly, it provides that stock relief at the rate of 50%, rather than 25% as provided for in section 666 (1), applies where a farmer, other than certain qualifying farmers, is a partner in a registered farm partnership.
Secondly, it substitutes a new subsection (4) in section 666 for the purposes of this section. This provides that the earlier stock relief deadlines in section 666 (4) of 31 December 2012 for companies and the year 2012 for individuals are extended to 31 December 2021 and the year 2021 respectively for the purposes of this section.
A qualifying farmer, within the meaning of section 667B, who is a partner in a registered farm partnership, is entitled to the enhanced rate of relief of 100% for a four-year period as provided for in that section. Where appropriate, the qualifying farmer reverts to the 50% rate provided for in this section for registered farm partnerships, rather than to the standard rate of 25%.
The cash equivalent of the relief is limited to €7,500 over a three year period.
For a qualifying period commencing on or after 1 January 2014 the maximum amount of stock relief that can be claimed is increased to €15,000 in the aggregate in the qualifying period (3 years.)
The 50% rate of stock relief applies in respect of accounting periods commencing on or after 1 January 2012 and ending on or before 31 December 2021.
This subsection allows for the establishment of a register of farm partnerships as part of the process of extending the meaning of “registered farm partnership” for the purpose of this section.
Firstly, it provides that the Minister for Agriculture, Food and the Marine, after consulting with and with the approval of the Minister for Finance, may establish and maintain a Register of farm partnerships by regulations, and that such regulations may provide for a number of matters including:
Secondly, it provides that every regulation made under subsection (4A) must be laid before the Dáil and such regulations may be annulled by resolution of the Dáil.
Relevant Date: Finance Act 2019