Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 3

Milk Quotas

Overview

This Chapter provides for a scheme of tax relief for the purchase of a milk quota. Capital allowances are granted in respect of expenditure incurred on the purchase of a milk quota under the National Milk Quota Restructuring Scheme which the Minister for Agriculture and Food introduced from 1 April 2000 or any other milk quota purchased after that date. The allowances are granted on a straight line basis over a seven year period.

With effect from 1 April, 2000 milk quotas no longer transfer with land with some exceptions such as in the case of family transaction and the sale of a holding as a going concern. Instead, the transfer of milk quota is operated by way of a pooled system at co-operative/dairy level. Under this scheme, quota holders may, at the end of each milk quota year, offer all or part of their milk quota for sale to their co-operative/dairy. The co-operative/dairy in turn may only sell milk quota to eligible producers attached to that concern under detailed rules determined by the Minister for Agriculture, Food and Rural Development (currently Agriculture and Food). While all producers are entitled to purchase milk quota under this scheme, priority is accorded to small and medium sized producers.

The allowances regime applies to purchases of a quota on or after 1 April, 2000, and was activated by Ministerial Order with effect from 6 April 2000. Where milk quota is subsequently sold or disposed of the normal balancing allowance or charge provisions will apply.

669A Interpretation

This section contains the definitions of terms used throughout the Chapter.

“levy” means the levy referred to in Council Regulation (EEC) No. 3950 of 28 December, 1992 establishing an additional levy in the milk and milk products sector.

“milk” means the produce of the milking of one or more cows and “other milk products” includes cream, butter and cheese.

“milk quota” is the quantity of milk or other milk products which may be supplied, sold or transferred free for direct consumption by a person carrying on the trade of farming, in a milk quota year, without that person having to pay a levy.

“milk quota restructuring scheme” is the scheme introduced by the Minister for Agriculture, Food and Rural Development (currently Agriculture and Food), under the provisions of Article 8(b) of Council Regulation (EEC) No. 3950 of 28 December, 1992 as amended.

“milk quota year” is the 12 month period beginning on 1 April and ending on 31 March.

“purchaser” has the meaning given to it under Council Regulation (EEC) No. 3950 of 28 December 1992.

“qualifying expenditure” is:

  • the amount of the capital expenditure incurred on the purchase after 1 April, 2000 of a milk quota by a milk producer under the Milk Quota Restructuring Scheme, or
  • where the quota is not purchased under the Milk Quota Restructuring Scheme, the lesser of—
    • the amount of the capital expenditure incurred on the purchase of the quota, or
    • the amount of the capital expenditure which would have been incurred if the price paid was limited to the maximum price set locally in each co-op area, for a milk quota under the Milk Quota Restructuring Scheme.

“qualifying quota” is —

  • a milk quota purchased by a person after 1 April 2000 under a Milk Quota Restructuring Scheme, or
  • any other milk quota purchased after 1 April 2000.

“writing-down period” is set out in section 669B(2).

Relevant Date: Finance Act 2021