Land agents urge tax reform to shape ‘vibrant post-Brexit farm sector’
PUBLISHED: 06:12 19 September 2017
Tax legislation should be overhauled to enable the farming sector to increase productivity post-Brexit, a professional body says.
The Central Association of Agricultural Valuers (CAAV), which has published a discussion paper looking at tax reforms which it argues could shape a vibrant farming sector, said Brexit offered “the greatest opportunity to determine agricultural policy since 1947”.
CAAV secretary Jeremy Moody warned such a chance may not come again.
“One of the key factors that needs addressing is access to land,” he said.
This involved freeing up more land for rent, as well as ensuring that land farmed in-hand is passed down to the next generation who will farm it best, he explained.
“Agriculture, short of physical investment in recent years, is on the cusp of a major technological revolution.
“And with many keen and skilled potential entrants, it is at a point where an improved tax system could yield real dividends.”
A recent Irish study showed that putting land into the hands of trained farmers increased output by 12%, more than the increase achieved by passing land on to the younger generation.
The paper, which reviews potential tax measures that could aid agricultural and environmental productivity, considers ways to assist entry, progression and exit from farming, as well as innovation and investment, resilience, and the management of risk.
The successful introduction in Ireland of rent relief from income tax, geared to length of tenancy, has encouraged more letting of land over longer time periods, the CAAV argues.
“We have seen a 30% increase in the number of landlords offering tenancies for five years or more,” said Mr Moody.
“In conjunction with the new Residential Nil Rate Band Amount for Inheritance Tax, giving relief on a home passed down the family, could have a powerful stimulus as a retirement package.”
Government tax policy has favoured companies under Corporation Tax, leaving farming’s sole traders and partnerships behind, the CAAV said. “Businesses should be treated equally for what they do, not discriminated against for the way they are structured,” said Mr Moody.