Section 664 of the Taxes Consolidation Act 1997 provides for a relief to be applied where farmland is let under a qualifying lease, by a qualifying lessor to a qualifying lessee.
Farmland:
The farmland must be in the State, and land used wholly or mainly for the purposes of husbandry.
Qualifying Lease:
A qualifying lease must be in writing, or evidenced in writing. If the lease is not in writing, a note in writing should be requested, this note should contain:
- names & addresses of the lessor & the lessee,
- the acreage & address of the land,
- the terms of the lease – a qualifying lease must be for a definite term of at least five years.
The terms of the lease must be on an arms length basis – ie – a fair market rate.
Qualifying Lessor:
The lessor cannot themselves have leased the land on favourable terms.
Qualifying Lessor:
The lessee must farm the land on a commercial basis with a view to making a profit.
Connected persons:
The lessor & lessee must not be connected. The relief is not available for leases between connected persons.
Connected persons are:
- immediate family – parents, siblings, children, grandparents, grandchildren,
- Spouse / civil partner of the lessor, and / or their immediate family,
- Business partner of the lessor, and / or their immediate family.
How the Relief is given:
The qualifying lessor is entitled to a deduction from their total profits when computing the amount chargeable to tax.
The deduction is the lower of :
- the overall rental profits / gains, or
- the specified amount.
Specified amount
Contact us today to see if this relief is applicable to your circumstances, & talk about all other available reliefs.
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