In last week’s Farming Independent, farm tax specialist Martin O’Sullivan highlighted the consequences of this announcement and the cost it would impose on many farm families. Following a further announcement, Revenue has now rowed back on this move and young trained farmers who are the main shareholder in a farming company following the transfer, will continue to be eligible for the exemption.

A main shareholder refers to a person who holds more than 50% of the shares in a company that has voting rights attached, such that the person has a controlling interest in the company. Shares held by a spouse or civil partner may be taken into account in determining whether the minimum 50% shareholding requirement is met.

Revenue had said that the transferee must farm the land themselves and not through a company.

“The policy intent behind young trained farmer relief is to encourage younger generations of farmers with qualifications to take on farms. The relief is not intended to apply where a farm is leased to a company or for companies to benefit from the relief,” it said.

The revised guidance now states that: “Revenue accepts that the requirement that the transferee spends at least 50% of his or her normal working time farming the transferred land may be satisfied where he or she carries out the farming activities through a company or a partnership.

“For the relief to apply in the case of a company, the individual must be the main shareholder and working director of the company and must farm the land on behalf of the company.”

Many farms are already trading as companies and if the u-turn didn’t take place, these farmers would have had no option but to forgo the exemption.

For a typical 100ac farm, this could amount to €15,000. This would have removed one of the main incentives to passing on the farm in a timely manner.