There has been a strong farmer reaction to last week’s front page story about the slowdown in on-farm construction. As Martin Merrick reports in this week’s Focus on slurry storage, cashflow is not the only thing holding up investments. Farmers describe the lack of policy information as a major barrier curtailing investment.

Many have plans to increase their slurry storage but are finding it difficult to justify the cost, given the lack of clarity around the future of the Nitrates regulations.

The lack of detail on the Budget 2024 announcement of a separate ceiling in TAMS for slurry storage is also holding up farm investments.

No clarity

Further detail on grant aid aimed at encouraging tillage farmers to invest in facilities to import slurry has also been disappointing. How can farmers make plans and investments that will take upwards of a decade to finance when there is no clarity?

Upcoming changes to Capital Gains Tax

Upcoming changes to Capital Gains Tax reliefs should be studied carefully by farmers and family-owned agri businesses.

As Declan O’Brien writes, a new limit of €10m on Retirement Relief on Capital Gains Tax (CGT) on transfers of family business assets to children, when the transferor is aged between 55 and 69, will be introduced next year. A €3m limit will apply for those aged 70 or more.

Until now the value of assets transferable within the family was unlimited and some tax consultants are warning that the change could result in families delaying the transfer of some or all of the family business assets until death, as a way to avoid a punishing 33% CGT.

Farm transfers

While the €10m limit may not trouble the majority of farmers, rising land prices could well bring the long-standing €3m cap into sharp focus for some larger farms.

With timely farm transfers already a major problem for the industry, these new limits could either accelerate or slow down the transfer of agricultural businesses.

Potentially, it also brings bigger farms and large landowners into the tax net.

No matter when farm and business transfers are planned, proper financial and tax advice is essential.