Revenue Note for Guidance
This section provides a “succession tax credit” of €5,000 per annum in respect of succession farm partnerships. This is a succession planning initiative to encourage farmers to form partnerships with young trained farmers and to transfer ownership of the farm, within a specified period, to that young trained farmer. This provisions applies only to individuals, a company cannot enter a succession partnership.
A primary participant may apply to enter a registered farm partnership on the register of succession farm partnerships and shall comply with all requirements relating to such application.
A registered farm partnership must comply with the following conditions in order to be entered on the register:
This subsection sets out certain rules where farm assets are jointly owned or farmed prior to the formation of the succession farm partnership. Each person who jointly owns or holds an interest in the farm assets must agree to the transfer of those assets in accordance with the agreement under subsection 2(d). Each individual who jointly farms the land which is to be transferred may become a partner in the partnership notwithstanding that the individual may be a non-active partner.
A farmer may form a succession farm partnership to transfer or sell farm assets jointly to a successor and the successor’s spouse/civil partner even if the spouse/civil partner would be a non-active partner.
The Minister will only register a succession farm partnership where the partnership has satisfied all the qualifying conditions.
Each partner in the succession farm partnership shall be entitled to a tax credit, referred to as a succession tax credit, for the year of assessment in which the registration takes place and each of the 4 years immediately following that year, which is the lesser of
No partner in a succession farm partnership can claim the succession tax credit once a successor has reached the age of 40.
If the agreed transfer of the farm assets does not take place the succession tax credit claimed by all partners will be clawed back from the farmer. However where it is shown to the satisfaction of a Revenue officer that the farm assets were not transferred as the successor would not complete the transfer, the succession tax credit will be clawed-back from the successor. Where the farm assets were not transferred due to mutual agreement between the parties, the succession tax credit may be clawed back from the party who claimed the credit.
The Minister may make regulations to provide for the establishment and maintenance of a register of succession farm partnerships.
A lifetime ceiling of €70,000 applies for EU State Aid purposes to the amount of aid granted to a young trained farmer under the Agricultural Block Exemption Regulation (paragraph 7 of Article 18 of the Commission Regulation (EU) No. 702/2014). This means that the amount of tax relief received by a partner in a succession farm partnership must be aggregated across the relevant schemes: i.e. section 667D, section 667B and section 81AA SDCA 1999. The cash equivalent of the tax relief received cannot exceed €70,000.
Relevant Date: Finance Act 2019