Stamp Duty Measures
An indicative list of the stamp duty measures that are available to the farming sector are listed here, along with a brief explanation (updated for changes introduced in Budget 2015). Please note that these do not purport to give a definitive legal interpretation of the various measures and individuals may wish to seek professional advice if availing of them.
- Stamp Duty Consanguinity Relief on Non-Residential Transfers
- Stamp Duty Exemption on Transfers of Land to Young Trained Farmers
- Stamp Duty Exemption for Certain Family Transfers
- Stamp Duty Relief for Commercial Woodlands
- Stamp Duty Exemption on Single Farm Payment Entitlements
Stamp Duty Consanguinity Relief on Non-Residential Transfers
Budget 2012 introduced a new lower stamp duty rate of 2% on the consideration value for instruments relating to non-residential property (including agricultural land leases, sales and gifts).
Consanguinity relief provides under certain conditions for a 1% rate applicable to transfers to certain close relations, such as father/son or uncle/nephew until 31 December 2017. Thereafter transfers of all non-residential properties including farm transfers will be stamped at the full rate of 2%.Consanguinity relief is not available on leases or on transactions involving cousins and/or in-laws.
Between 1 January 2015 but before 1 January 2016, a conveyance or transfer by a person of any age can qualify for consanguinity relief.
Between 1 January 2016 and before 1 January 2018, only a conveyance or transfer by a person under 67 years of age can qualify for the relief.
The individual to whom the land is conveyed or transferred must either farm the land or lease it for a period of not less than 6 years to an individual, who farms the land. Revenue will accept that a lease may also be to a partnership or to a company (whose main shareholder and working director farms the land on behalf of the company). [Where land is leased to a company that is owned equally by an individual and that individual’s spouse or civil partner, and at least one of them satisfies the working director and the farming requirements, the relief will apply.]
The person who farms the land (including partners or working director as appropriate) must –
- Be holder of or, within a period of 4 years from the date of transfer or conveyance, be the holder of an agricultural qualification (of the kind listed in Schedule 2, 2A or 2B of the Stamp Duties Consolidation Act 1999) or
- Farm the land for not less than 50% of his or her normal working time – see below regarding the meaning of “normal working time”.
The land must be farmed on a commercial basis and with a view to the realisation of profits – thus confining the relief to genuine farmers.
“Normal Working Time” Test
Revenue will accept, for the purposes of this relief, that “normal working time” (including on-farm and off-farm working time) approximates to 40 hours per week. This will enable farmers with off-farm employment to qualify for the relief provided they spend a minimum of 20 hours working per week, averaged over a year, on the farm. If a farmer can show that his or her “normal working time” is somewhat less than 40 hours a week, then the 50% requirement will be applied to the actual hours worked –subject to being able to show that the farm is farmed on a commercial basis and with a view to the realization of profits.
It is expected that in the majority of situations it should be clear from the level of farming activity being carried on that the normal working time requirement is satisfied. If there is any doubt Revenue will consider all information (including farming records) provided by a farmer in relation to his or her normal working time and farming activities.
If in exceptional situations it can be shown that, on an on-going basis, certain farming activities, e.g. farming involving the occupation of woodlands on a commercial basis, are carried out on a commercial basis and with a view to the realisation of profits, but do not require 50% of normal working time / 20 hours per week to be spent on such farming activities, Revenue will take this into consideration in deciding whether the relief is due.
Stamp Duty Exemption on Transfers of Land to Young Trained Farmers
This is a longstanding relief which provides for a full exemption on stamp duty on transfers of farm land to certain young trained farmers. The transfer can be by gift or sale. To qualify the farmer must be less than 35 years of age on the date of execution of the deed of transfer and must of have attained a minimum agricultural education standard which is set out on a list of qualifications in Schedule 2B of the Stamp Duties Consolidation Act 1999 which are also published by Revenue in Leaflet SD 2B (this document also includes more detailed information on this measure). The young farmer must for a period of five years spend not less than 50% of his/her working time farming the land. The exemption granted will be clawed back if the land is disposed of within a five-year period and is not replaced within one year of disposal. Transfers by lease do not qualify for the stamp duty exemption.
This exemption is due to expire on 31 December 2015, having been extended for a three-year period in Budget 2012.
Stamp Duty Exemption for Certain Family Transfers
Since 2 April 2007 an exemption from stamp duty on certain transfers of farmland from a child to a parent is available in the context of certain family arrangements, which are also applicable to retirement relief from capital gains tax. The stamp duty exemption arises where the family arrangement is in the nature of an exchange or a part exchange involving the transfer of farmland by the child to the parent who is availing of the retirement relief from capital gains tax.
Stamp Duty Relief for Commercial Woodlands
A partial relief from stamp duty is available in respect of certain instruments relating to the sale or lease of land on which “trees” are growing. The partial relief is given by providing that the value of any trees growing on the land at the time the land is sold or leased will not be taken into account if:
- The trees are being managed on a commercial basis with a view to making a profit,
- The trees are growing on a substantial part of the land.
This exemption is also applicable to gifts.
Stamp Duty Exemption on Single Farm Payment Entitlements
Stamp duty is not chargeable on an instrument for the sale, transfer or lease of an EU Single Farm Payment entitlement. Where an instrument consists of both a payment entitlement and other chargeable property, the consideration should be apportioned between the payment entitlement and the other property contained in the instrument. Only that part of the consideration which relates to property, which is not a payment entitlement, will be chargeable to stamp duty.