The Income Averaging regime allows a farmer’s taxable profit to be averaged out over a 5-year period. This regime is being amended to allow an “opt out” in a single year of low income with any deferred tax liability becoming payable over subsequent years. . This ‘opt out’ may be availed of for farm income from 2016 onwards.
Farm Restructuring Relief, which provides an exemption from CGT on certain sales or exchanges of farmland, has been extended to the end of 2019.
The farmer’s flat-rate VAT addition, which compensates unregistered farmers for VAT incurred on their farming inputs, is to be increased from 5.2% to 5.4% with effect from 1 January 2017.