The number of young people opting for a career in farming is likely to increase as a result of changes in farm taxation to be implemented after Budget 2016.

The introduction of an annual income tax credit of €5,000 for families who farm in partnership - whereby the farm is transferred to the next generation after an agreed period of up to ten years - will encourage the lifetime transfer of family farms, and increase the number of young people entering into farming, property advisory firm Sherry Fitzgerald claims.

The Capital Acquisitions Tax ( CAT) threshold for transfers between parents and their children is now being increased from €225,000 to €280,000. In its post-budget analysis of the impact on farming the firm identifies this as “a very welcome initiative as it reflects the increase in asset values.”

An earned income tax credit of €550 has been introduced for self-employed people, including farmers, and this figure is expected to increase in future  budgets.

“Although the budget was not directly targeted at encouraging land transfer via sale, measures addressed have the potential to indirectly affect the land market by providing more confidence at farm level,” a Sherry Fitzgerald post-budget analysis states.

“It will ensure that farmers entering new schemes under the Rural Development Plan will get much-needed payments. However, the scale at which farm profitability will improve remains uncertain.”

Source: www.businessworld.ie