Tax reliefs for farm succession

With even an average-sized farm likely to approach €1m in value, full exemption from a 7.5% stamp duty is a significant incentive for farm transfer.

One of the inbuilt obstacles to a smooth process of farm succession in Ireland is that it is significantly affected by tax reliefs, which in turn depend on the year-to-year state of the government's finances.

This year, like many years before, farmers anxiously await the Budget 2026 announcement in October, to hear if the Young Trained Farmer (Stamp Duty) Relief will continue beyond December 31, 2025.

The relief provides a full exemption from Stamp Duty (which would normally be charged at a rate of 7.5%) on the transfer of farmland, subject to certain conditions being met. The core purpose of the relief is to promote lifetime transfers of land and encourage more young people to pursue farming. Both the Government and the EU strongly support these goals.

The Young Trained Farmer Relief means you pay no stamp duty when agricultural land is transferred to you, if you are aged under 35, have a relevant agricultural qualification, have submitted a business plan to Teagasc, you are registered for income tax, and are becoming the head of the farm holding.

You must intend to spend at least 50% of your normal working time farming the transferred land for at least five years from the date of transfer, and keep ownership of the land for at least five years from the date of transfer.

With even an average-sized farm likely to approach €1m in value, full exemption from a 7.5% stamp duty is a significant incentive for farm transfer.

But will the relief get the thumbs-up in the Budget, at a time when 15% tariffs on goods exported from the EU to the US have added to global uncertainty for our export-dependent economy, and the Government seems mindful of the need to invest in future-proofing the economy, and to protect strong tax receipts, which are vulnerable to global shifts?

The upcoming Budget is likely to see a redrafting of new Agricultural Relief rules.

Agricultural tax relief to encourage generational renewal featured prominently when IFA President Francie Gorman led a delegation to a pre-Budget meeting with Ministers Paschal Donohoe and Jack Chambers.

Mr Gorman said, “We are clear that this should be available to farm families, who wish to hand on their farm in a way that works for both generations.” However, the stamp duty exemption is only one of a number of tax reliefs related to agriculture due to "sunset" at the end of 2025. The Department of Finance is reviewing these in advance of Budget 2026, and they are all integral to making agriculture an attractive place to work for the next generation.

Just how devastating budgets can be for farmers became clear in the UK last October when the Labour government's finance minister Rachel Reeves announced death duties on land worth more than £1m, from April 2026. Nearly one in five UK farms was unprofitable in recent years, but that hasn't stopped the Labour government from introducing an inheritance tax liability likely to reach £435,000 for a 200-acre farm.

Here in Ireland, farmers will hope for a favourable Budget, including continuance of the Farm Consolidation (Stamp Duty) Relief available when holdings are consolidated by way of linked sales and purchases of land, and where land is transferred as a gift or by exchange. Stamp duty at only 1%, instead of 7.5% without the relief, is applied to the excess value of land acquired over the value of the land disposed of. The relief has been renewed for three-year periods on several occasions, and is due to expire on December 31 next.

Farm Restructuring (CGT) Relief has the same "sunset" date. It applies to a sale, purchase or exchange of agricultural land for farm restructuring purposes.