658A Farming: accelerated allowances for capital expenditure on slurry storage

Summary

This section provides for a scheme of accelerated wear and tear allowances for expenditure incurred by farmers on capital expenditure incurred on the construction of slurry storage facilities and certain associated capital items. The scheme is available to persons carrying on a trade of farming that incur qualifying expenditure on certain capital items for the construction of slurry storage facilities between 1 January 2023 and 31 December 2025 for the purposes of the farming trade. Where expenditure is qualifying, the farmer will be entitled to claim wear and tear allowances on the expenditure over a period of 2 years, instead of 7 years in the case of farm buildings and 8 years in the case of plant and machinery, subject to a maximum tax benefit of €500,000 per undertaking.

Details

Definitions

(1) “qualifying capital items” means the items specified in column (1) of the Table in Part 2 of Schedule 35A meeting the description specified in column (2) of that Table opposite the reference to those items in column (1);

“qualifying expenditure” means capital expenditure incurred during the relevant period on the provision or construction, as the case may be, of qualifying capital items;

“relevant period” means the period commencing on 1 January 2023 and ending on 31 December 2025;

“relevant regulation” means Article 7 of the European Union (Good Agricultural Practice for Protection of Waters) Regulations 2022 (S.I. No.113 of 2022);1

“relevant tax”, in relation to a person, means—

1. where the person is a company, any corporation tax, and
2. where the person is not a company, any contributions paid under the Social Welfare Consolidation Act 2005, income tax or universal social charge;

“Rescuing and Restructuring Guidelines” means the Communication from the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty;2

“undertaking in difficulty” is to be interpreted in accordance with section 2.2 of the Rescuing and Restructuring Guidelines.

Application

Accelerated capital allowances for the construction of slurry storage facilities are available to persons who incur qualifying expenditure for the purpose of a trade of farming land occupied by that person.

Allowances

(2)(a)Where an eligible person incurs, between 1 January 2023 and 31 December 2025, qualifying expenditure on qualifying capital items for the purposes of building a slurry storage facility for use in their farming trade, then for any chargeable period a wear and tear allowance is to be made under section 658 in respect of any qualifying expenditure, section 658(2) will apply as if the reference in section 658(2)(a) to 7 years were a reference to 2 years, and as if the farm buildings allowance to be made under section 658(2)(b) shall be 50 percent and subsection (12) of that section shall apply as if “Chapter 1 or 2 of Part 9” were substituted for “Chapter 1 of Part 9”.

(2)(b)Or where a wear and tear allowance is to be made under section 284 in respect of any qualifying expenditure incurred on qualifying capital items, section 284(2) will apply as if the reference in section 284(2)(ad) to 12.5% were a reference to 50%.

(3)Only expenditure attributable to building work actually carried out in the period 1 January 2023 to 31 December 2025 will benefit from the accelerated capital allowances.

(4)Subsection (2) will not apply where the person concerned—

• is, or is part of, an undertaking in difficulty,
• is subject to an outstanding recovery order following a previous decision of the Commission of the European Union that declared an aid illegal and incompatible with the internal market, or
• is, or is part of, an undertaking that not an SME.

(5)The aggregate amount of relief (see subsection (8) for the calculation of relief) granted to a person under this section shall not exceed €500,000.

(6)This subsection will apply to a person for a chargeable period where the aggregate of the amount of the relief (see subsection (8) for the calculation of relief) granted to the person in that chargeable period and in any previous chargeable periods exceeds €10,000.

(7)Where subsection (6) applies to a person for a chargeable period, then, notwithstanding section 851A (which provides for the confidentiality of taxpayer information), the Revenue Commissioners may disclose the following information in respect of the year in which the chargeable period ends:

• the name of the person,
• the sector of activity at NACE group level,
• the territorial unit, within the meaning of the NUTS Level 2 classification specified in Annex 1 to Regulation (EC) No 1059/2003 (as amended), in which the person is located, and
• the year in which the relief is granted.

(8)For the purpose of subsections (5) and (6), the amount of relief granted to a person in a chargeable period will be calculated using the formula:

R = A – B

Where:

“R” = the amount of the relief granted to the person in the chargeable period,

“A” = the amount of relevant tax that would be payable by the eligible person for the chargeable period, but for subsection (2), and

“B” = the amount of relevant tax payable by the person for that chargeable period.

Relevant Date: Finance Act 2024