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To Green Cert or not to Green Cert?

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Children or nieces and nephews that are to inherit agricultural land often do the Green Cert.
Sometimes it is of benefit, but not always, such as if the individual is 35 or older or does not
intend to farm the land but lease it out.


What is the Green Cert? The Green Cert is a FETAC Level 6 Specific Purpose Certificate; the
modules covered are Beef, Sheep and Grass Production, Farm Business, Pesticide Use, Farm
Safety and Maintenance of farm buildings as well as comprehensive training in Beef, Sheep
and Grass Management Skills.

Upon successful completion a qualified farmer under the age of 35 is exempt from Stamp
Duty
payment on the transfer of land which is presently 7.5%.


A young trained farmer is a person that has attained the Green Cert qualification or its
equivalent. What is seen as ‘young’? In certain schemes associated with the CAP reform
programme (EU-funded), a young trained farmer is 40 or under, whereas with the Stamp
Duty Exemption Scheme and 100% Stock Relief Scheme (Government-funded), a young
trained farmer is under 35.

Do you need to be a young trained farmer to avoid gift/inheritance tax on the transfer of
the family farm? And what other benefits accrue?

Being a young trained farmer has no bearing on gift or inheritance tax. However, under the
rules of Agricultural Relief, being a trained farmer, having a Green Cert or equivalent but
being over 35 gives you the option of farming the holding on a part-time basis rather than
being required to farm it for 20 hours or more per week or leasing it to a full-time or
qualified farmer.


There are various schemes, incentives and benefits that favour young trained farmers which
can make a significant difference for someone starting up and/or taking over a farm. The
current list comprises:

 Stamp Duty Exemption on farm transfers,
 Stamp Duty Exemption on land purchase,
 100% Stock Relief,
 Succession Farm Partnership tax credits,
 Complimentary Income Support (CIS-YF),
 Eligibility for National Reserve Entitlements,
 TAMS grants 20% top up.

We will only look at the stamp duty reliefs in this blog

Stamp Duty Exemption on farm transfers

A zero rate of stamp duty applies to farmers who are under 35 years of age and who have
satisfactorily attended a course as set down by the Revenue Commissioners, typically a
Green Cert.


The relief applies where no power of revocation exists and runs until December 31, 2025.


The land which is the subject of the transfer must be retained for five years and must be
farmed by the transferee for at least 50% (typically 20 hours) of their normal weekly
working hours.


There is a notable distinction between this relief and other reliefs, such as Agricultural
Relief, in that the usage conditions can only be satisfied by the transferee, and the period
for which the land must be farmed is 5 years and not 6.


Family transferees who fail to qualify for the exemption will have to pay 1% Stamp Duty, so
for a farm worth say €1m, qualifying for the exemption is worth €10,000.

Stamp Duty Exemption on land purchase

Similar to farm transfers and subject to the same conditions, an exemption to Stamp Duty
applies for young trained farmers who buy land — but the saving is worth 7.5% of the
purchase price.


So a plot of land costing €500,000 will attract a saving of €35,000.


There is an upper ceiling on the amount of relief available on transfers and purchases which
equates with €70,000 in tax value to include any relief granted under the 100% Stock Relief
Scheme and the Succession Partnership Scheme.

When is Stamp Duty Payable?

Stamp duty is payable on land transferred by deed e.g. a gift from parent to child or land
bought on the open market. The current rate of stamp duty on agricultural land is 7.5% of
the market value.


To benefit from stamp duty relief, the following conditions must be met:
 Recipient must be under 35 years at the date of the transfer
 Recipient must have the Green Cert. If they do not and will turn 35 years before
getting the Green Cert, they should have the land transferred before their 35 th
birthday, pay the stamp duty and claim a refund once they have Green Cert.
 Recipient must undertake to spend no less than 50% on their normal working time
farming the land for 5 years from the transfer date (e.g. those working a 40-hour
week must work no less than 20 hours/week farming).

 Recipient must complete a Teagasc business plan “My Farm My Plan
and have it certified before the transfer date.

If the farmer cannot claim young trained farmer relief, they may be entitled to
consanguinity relief with a much lower stamp duty rate (only 1%).


A farmer does not need the Green Cert to claim consanguinity relief.


To benefit from consanguinity relief, the following conditions must be met:

 Transfer of land between blood relatives
 Recipient must either farm the land for 50% of their normal working week or lease to
a farmer for 6 years from date of the deed of transfer. If they intend to farm and
have the Green Cert, there is no weekly minimum of hours, they have to farm the
land on a commercial basis with a view to realising profit.

It may not be worth doing the Green Cert in the following cases:


 If recipient has turned 35 years old
 Where stamp duty bill is €3,000 or less.
 If the recipient does not intend to farm the land for 50% of their normal working
time. Many children today work full-time off-farm and the income from farming can
be taxed at the higher 40% rate, so it makes better financial sense to lease out the
land and claim income tax lease exemption.


This exemption gives a tax-free farm income up to €18,000 where the land is leased
for 5-7 years (threshold rising the longer the lease term, capped at €40,000 where
land is leased for 15+ years).

EU/DEPT OF AGRICULTURE SCHEME BENEFITS

Young Farmer top-up


A farmer must have the Green Cert to claim Young Farmer top-up. This typically means a
top-up on entitlements of approximately €68/hectare to maximum of 50 ha, €3,400 per year
for a maximum of 5 years. However this is envisaged to increase to an average of €176/ha
under the new CAP in 2023 (up to €8.750 p/a for a maximum of 5 years). In this case, having
the Green Cert would be beneficial, assuming the person inheriting or gifted the land is
farming rather than leasing.

Entitlements under the national reserve


A farmer must have the Green Cert to claim entitlements under the national reserve, to
claim these entitlements the land must have no entitlements or their value must be below
the national average.


For further information on Green Cert courses, click this link.

The information in this article is only to be used as a guide. We always recommend
seeking professional independent advice to discuss your own circumstances.


Thinking of selling or renting, or need a valuation for a family transfer? Give Brendan
at Mannix Property Services a call on 086 050 8804

on Friday, December 9, 2022 in Uncategorized

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