BY TOM O’FARRELL
BECAUSE every farmer is different, there’s no ‘catch all’ solution for saving on tax. However, there’s a long list of tax-saving tips that can reduce taxable income. Farmers should use every available tip because over-looked tax deductions are wasted opportunities. At Ifac we have compiled a list of the 20 best tax deductions and tips for 2019.
STAMP DUTY AND LAND
Stamp duty is a tax charged on the transfer of property. In general the only factor affecting the amount of stamp duty charged is the value of the property/land. The transfer of livestock, machinery and basic payment entitlements are not subject to stamp duty. The rate of stamp duty applicable to residential property is 1% on the first €1m, and 2% on the excess over €1m. Stamp duty on non-residential property is 6%.
- Blood relative relief: Stamp duty relief has been enhanced so that any transfer of farm assets between blood relatives is subject to 1% stamp duty instead of the new 6%. Age restrictions on this relief have been removed. Other conditions still remain and should be reviewed before any transfers takes place.
- Young trained farmer relief: This exemption from stamp duty is to encourage the transfer of farm-land to a new generation of farmers with relevant qualifications. The transfer may be by way of a gift or sale.
It applies where the young trained farmer is under 35 at date of the transfer. Young trained farmers must have the relevant agricultural qualifications or must acquire the qualifications within four years from the date of execution of the transfer instrument. The young trained farmer must spend 50% of their time farming the land to qualify.
The exemption is extended to 31 December 2021 but with onerous conditions from 1 January 2019 including the relief is aggregated with young trained farmers stock relief and in total the maximum relief is limited to €70000. In addition, it is limited to a start-up / transfer and a business plan must be submitted.
VALUE-ADDED TAX (VAT)
Farmers and farming companies do not have to register for VAT, irrespective of turnover. Farmers are entitled to apply a flat-rate addition of VAT (5.4%) to their prices when supplying agricultural produce or services to VAT registered customers. Flat-rate farmers are also entitled to reclaim VAT on certain capital expenditure.
- Capital expenditure VAT refund: Farmers who are not registered for VAT can get a refund on the VAT element of any invoices relating to capital expenditure, for example land improvement, yards, fencing, drainage or buildings and fixed equipment, such as milking parlours, scrapers, bulk tanks, etc (repairs are not covered). You can claim VAT back on items purchased in the last four years.
Capital Gains Tax
If a farmer disposes of certain assets such as land, buildings, quotas, shares or entitlements, he or she may be liable to capital gains tax. The farmer must file a return for any 2018 gains or losses by the return filling date in 2019.
For more, read this week’s Connacht Tribune.
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State to look at plan to protect historic monastic ruins
Officials from the Office of Public Works have confirmed that they will visit what is widely regarded as the most complete Franciscan monastic ruins in Ireland to see what works are required to save it.
And a local public representative has said that he does not want to be part of a generation that allowed Ross Errilly Franciscan Friary to fall into worse disrepair.
Correspondence sent this week to those who diligently look after the friary has suggested that the OPW’s Head of Historic Properties will come down to establish what emergency works are required.
This follows the recent visit by the Minister for the Office of Public Works Patrick O’Donovan to Ross Errilly Franciscan Friary which dates well back before the 1400s and requires urgent works to be carried out.
Cllr Andrew Reddington (FG) said: “It would be an absolute disgrace if we were the generation that allowed this friary to deteriorate even further.”
It was explained to the Minister while visiting the Abbey that it is in desperate need of emergency works and it was essential that the Minister brought this back to his department.
He was informed that it was around the late 1980s when there was any major works carried out on the abbey by the OPW.
“The abbey needs remedial work urgently as it is falling into disrepair and the main area of concern is the tower.
“There has never been any serious remedial work done on the tower and there has never been scaffolding put up around the outside of it to deal with the exterior of the tower,” Cllr Reddington told The Connacht Tribune.
A local group who met with the Minister explained that there is no electricity at the abbey or any toilet facilities for visiting tourists.
He was informed that the nearest electrical pole is only 200m away, so it wouldn’t be difficult to get electricity to the abbey.
The abbey, he was told, needs electricity which would then mean there would be options in terms of security lighting and closed-circuit television to prevent any vandalism taking place.
Those who look after the Franciscan Friary – including Glen Corbett and former Galway footballer Seamus McHugh – gave a detailed run down of emergency works that need to happen at the abbey.
They said that it was critical that emergency works start as soon as possible to protect the abbey for future generations.
The Minister committed to working with the group on this. The delegation than joined OPW officials and Finna Construction who gave them a tour of the OPW offices in Headford which benefited from a €5 million investment.
This week came the commitment that the OPW would visit the friary to establish the emergency works that need to prioritisation.
(Photo: Seamus McHugh, Minister Patrick O’Donovan, Glen Corbett and Cllr Andrew Reddington at Ross Errilly Franciscian Friary in Headford)
Gardaí issue alert over fuel thefts
Householders, farmers and truckers in the West of Ireland have been advised to put security measures in place to protect their fuel tanks, following a number of thefts over the past month.
While the thefts aren’t an everyday occurrence, Gardaí have advised that with fuel prices likely to remain high over the coming months, basic security precautions should be put in place.
Galway is one of a number of counties where fuel thefts have occurred over recent weeks with home heating oil, trucks and farm diesel in different parts of the country targeted by the thieves.
Sergeant Michael Walsh, Galway Garda Crime Prevention Officer, said that while the number of thefts reported in Galway had been quite small, fuel thievery was still an ongoing problem.
He said that some of the precautions recommended included a secure fencing off, of outdoor fuel tanks with good quality perimeter fencing.
“Fuel tanks that are located away from houses or offices are most at risk and in these situations, robust perimeter fencing, and gates need to be properly secured.
“We are also recommending that people and businesses consider installing alarms, anti-siphoning devices, security lighting and CCTV cameras,” said Sergeant Walsh.
He added that fuel thieves often used small drill and syphoning pump to steal the fuel with the whole operation completed in a matter of minutes.
Last month in Limerick, thieves stole an estimated €500 worth of diesel from trucks parked overnight in a business park – large trucks and artics can have a fuel capacity of over 100 gallons.
“As with a lot of robberies, fuel thieves will tend to pick out the opportunist targets. Fuel is a valuable commodity and basic security measures need to be put in place,” said Sergeant Walsh.
Where businesses have multiple users of their fuel tanks, the Gardaí also advise that a fuel management system should be put in place to record the users as well as the dates and times when they access the supply.
Housing plan turned down over lack of pedestrian access
The lack of a pedestrian connection to the town centre was listed as one of the reasons why a development of almost 40 houses has been turned down in Ballinasloe.
The proposed development at Poolboy would have been adjacent to an existing housing estate – but planners cited the lack of connectivity to the town centre as a reason why it was refusing the application.
The plans outlined the provision of a mix of three-bedroom detached and semi-detached houses along with 20 townhouses as part of the 38 unit development.
They were submitted by Crownbell Limited, which is based in Clarinbridge, and sought a connection to the existing access road serving the Cuil na Canalacht estate which was granted permission back in 2012.
However, Galway County Council refused planning on the grounds that the proposed development did not provide sufficient pedestrian access to the wider urban area of Ballinasloe.
They said that to grant planning would pose an intensified risk to the safety of pedestrians and other road users and lead to “unsustainable mobility patterns” in the immediate area.
It was stated that the development would be prejudicial to public safety and contravene the sustainable transport policy objectives of the Galway County Development Plan.
Furthermore, planners said that the site was in an area that is zoned open space recreation and amenity in the Ballinasloe Local Area Plan.
They said that this seeks to protect and enhance such areas for exercise facilities, sports grounds and playing fields and to grant planning would set an undesirable precedent.
Given the site’s location to the River Suck, the applicants submitted an environmental impact assessment and screening report. The development would be around 300 yards from the River Suck Callows.
It was proposed that the development would connect to the existing sewer scheme, and it was stated in a submission that it would not overly burden the system.
However, it was a lack of pedestrian access from the site into the town centre which eventually scuppered the proposed development plan.