The company clamps down on tax evasion with a long-term land lease contracts

  • The company clamps down on tax evasion with a long-term land lease contracts
    FarmIreland.t. E.
    The company has recently stopped the land owners, avoiding taxes by tightening the rules around the tax benefits available for long term lease of farmland.
    https://www.independent.ie/business/farming/agri-business/finance/revenue-clamps-down-on-tax-avoidance-with-longterm-land-leases-37214878.html
    https://www.independent.ie/business/personal-finance/article37217732.ece/cfe76/AUTOCROP/h342/2018-07-15_bus_42352590_I1.JPG

  • Email

The company has recently stopped the land owners, avoiding taxes by tightening the rules around the tax benefits available for long term lease of farmland.

Long-term leases will be coming increasingly common on the back of attractive tax incentives announced in 2015.

In the budget for 2015, the rent of land was made more attractive by increasing 50pcs in tax breaks on rental income.

With a switch in the focus of land-use policies in contrast to traditional ownership of land, is the main policy measures to stimulate greater activity in the long term rental market.

However, the company said that the anti-avoidance measures to prevent exploitation of assistance was provided for a new rule that a lease must not be a qualifying lease in cases when people effectively swaps land with another person, or where the land is farmed; in whole or in part, a qualifying landlord.

Leasing is where the land is leased by the lessor (landlord) lessee (active farmer) for at least five years.

In order to stimulate leasing, the land owner is exempt from payment of income tax on lease rental income to each non-taxable minimum.

The lease must be in writing and print revenue for the landlord to take advantage of the extended tax benefits.

See Also


Of the 10.3 million farmers in the EU, two thirds are less than 5 ha in Size

Was just over 171 million hectares of land in the European Union (EU), used for agricultural production in 2016 – about 40 PCs of all EU land. It supports approximately 10.3 m farmers and farm managers.

The term of the lease and the maximum limits of tax benefits are:

  • 5 to 7 years rent up to 18 000 Euro rental income per year;
  • 7 to 10 years rent amounts to €22,500 rental income per year;
  • 10 to 15 years rent is equal to 30 000 Euro rental income per year,
  • 15+ year lease is €40,000 rental income per year.

The rental income can include income from land and benefits.

There are no tax incentives for the rental of a blood relative (wife/son/daughter/sibling), but used for rental or niece or nephew.

Although the rental income to each threshold, are exempt from income tax, universal social charge (USC) and the PIF is still to impose on it the rental income.

Extension dairy has led to increased demand for land and long term lease.

Therefore, where the landscaping, the scale of investment required to improve land productivity in the long term provide the key to farmers making long-term planning and investment.

Online Business Classes