A number of tax measures to support farming have been announced by Minister for Finance Michael Noonan in the Budget. This follows a review of agri-taxation announced in last year's Budget.

He said additional land must be made available to young and active farmers who want to expand following the elimination of the milk quota system next spring. Measures to encourage the long-term leasing of land and improve productivity include:

Increasing the income tax exempt thresholds by 50 per cent and introducing a new threshold for leases of 15 years and over;

Allowing relief where the lessee is a company;

Removing the current 40 years of age threshold for leasing relief;

Targeting Capital Acquisitions Tax relief for agricultural property to ensure it is used by active farmers;

Broadening Capital Gains Tax retirement relief allowing individuals to lease out their land for up to 25 years prior to disposal and still be eligible for the relief;

Extending CGT retirement relief to land let under conacre, which is disposed of, or converted to long term leasing before the end of 2016;

Extending stamp duty relief for non-residential land transfers between certain close relatives;

Removing stamp duty on agricultural leases in excess of five years;

Extending CGT farm restructuring relief to the end of 2016 and broadening it.

Mr Noonan noted that farming was our largest indigenous industry, with an annual turnover of about €26 billion and 170,000 employees. “It is not only important because of the number of people it employs but also because of where it employs those people – in every townland and along every byroad in Ireland.”

He said volatile agricultural prices made it difficult for farming families to earn a steady income over a number of years so he was increasing the range for income averaging from three to five years. “I am also allowing income averaging on farm income to be available to farmers who derive income from another trade or profession, if this is due to on-farm diversification. This measure will be reviewed after three years to assess how well it is working.”

The farmers’ flat rate addition for farmers not registered for Vat will be increased from 5 per cent to 5.2 per cent from January 1st.

Mr Noonan also announced an additional €6 million a year for three years to support horse and greyhound racing. A further €5 million will be allocated to Horse Racing Ireland for investment in racecourses.

To boost the activities of microbreweries, he said he was increasing the annual excise relief production ceiling for microbreweries from 20,000 to 30,000 hectolitres.