Section 81AA Transfers to young trained farmers

Summary

This section provides for full relief from stamp duty on the transfer of land to young trained farmers who meet certain conditions and where the instrument is executed on or after 2 April 2007 and on or before 31 December 2015. The relief applies to transfers by sale or by gift (i.e. it does not extend to leases). A power to revoke the transfer, whether it be contained in the instrument conveying or transferring the land itself or otherwise, will disqualify the young trained farmer from the relief. Under the section, the Further Education and Training Awards Council (FETAC) Level 6 Advanced Certificate in Agriculture (see Schedule 2B) is the new minimum education requirement from 31 March 2008.

By virtue of section 71 of the Qualifications and Quality Assurance (Education and Training) Act 2012 the National Qualifications Authority of Ireland (NQAI), the Higher Education and Training Awards Council (HETAC) and the Further Education and Training Awards Council (FETAC) were dissolved and replaced by a new body – the Qualifications and Quality Assurance Authority of Ireland (QQAAI). The references in section 81AA and Schedule 2B to the dissolved bodies have been updated in respect of qualifications awarded on or after 6 November 2012 - the establishment date of the new body.

Section 81AA also contains transitional arrangements (see subsections (14) and (15)) which enable the educational qualifications attained before 25 March 2004, for the purposes of section 81, and on or after 25 March 2004 and before 2 April 2007, for the purposes of section 81A, to be treated as educational qualifications for the purposes of section 81AA. A self-assessed stamp duty return must be filed under the e-stamping system in relation to instruments in respect of which relief is sought. Leaflet SD2B contains details of the relief.

Details

(1) “interest in land”, “land”, “PPS Number”, “Schedule 2 qualification”, “Schedule 2A qualification”, “Schedule 2B qualification” “young trained farmer”, are self–explanatory. The definition of “an interest in land” does not exclude the retention by the transferor of rights such as rights of residence, support and maintenance (see section 18).

“80 hours certificate” is a certificate awarded by FETAC for achieving the minimum stipulated standard in assessments completed for an 80 hours Teagasc approved training programme in farm management.

“180 hours certificate” is a certificate awarded by FETAC for achieving the minimum stipulated standard in assessments completed for a 180 hours Teagasc approved training programme which comprises 100 hours in either or both agriculture and horticulture and 80 hours in farm management.

(7) The relief given under the section is full relief from the stamp duty that would otherwise be chargeable on the instrument of transfer.

(1) To qualify for the relief the transferee must, on the date of execution of the instrument of transfer, be under 35 years of age and hold one of the qualifications which are set out in subsections (2), (3), (4) and (5) below.

(2) Subsection (2) requires that the transferee is the holder of a qualification set out in Schedule 2B (see Schedule 2B).

(3) Subsection (3) requires that the transferee is the holder of a letter from Teagasc confirming satisfactory completion of a course of training approved by Teagasc for persons who, in the opinion of Teagasc, are restricted in their learning capacity due to physical, sensory, intellectual disability or to mental health.

(4) Subsection (4) requires that the transferee is the holder, before 31 March 2008, of —

• a qualification from paragraph 1(f) or paragraph 2(h) of Schedule 2A and also the holder of a 180 hours certificate, or
• (4)(b)(i) a qualification from paragraph 3(b), (c), or (d) of Schedule 2A and also the holder of an 80 hours certificate.

(5) Subsection (5) requires that the transferee has, before 31 March 2008, achieved the required standard for entry into the third year of a full-time course, in any discipline of 3 or more years’ duration at a third-level institution, as confirmed by the institution, and also is the holder of a 180 hours certificate.

(6) Where Teagasc certifies that any other qualification corresponds to a qualification set out in Schedule 2B and also certifies that such qualification is deemed by the Qualifications and Quality Assurance Authority of Ireland (QQAAI) to be at least at a level equivalent to that of the Schedule 2B qualification, then that qualification will be treated as a qualifying one under Schedule 2B by the Revenue Commissioners.

In addition to the educational qualifications required the following conditions must also be satisfied:

• (8) the transfer must be by way of sale or gift and must be irrevocable;
• the young trained farmer, or each of them if there is more than one, must, for a period of 5 years from the date of execution of the instrument, ;
  • (8)(a) spend not less than 50 per cent of his or her normal working time farming the land and
  • (8)(b) retain ownership of the land

(9) The stamp duty relief may apply where the land is conveyed or transferred into joint ownership (e.g. as joint tenants or as tenants-in-common) where all the joint owners are young trained farmers and where all of them satisfy the conditions of the section. However, in cases where 2 of the joint owners are married or civil partners to each other, only one of them must be a young trained farmer.

(10) Adjudication has been abolished for instruments executed on or after 7 July 2012 and a self-assessed stamp duty return is required to be filed under the e-stamping system to claim this relief.

(11) Subsection (11) provides for the refund procedures.

(11)(a) & (b) A transferee, who meets all the conditions for the granting of the relief, on the date the instrument is executed, including the age requirement, but is not the holder of one of the qualifications set out in subsection (2), (3), (4) or (5), or a qualification which is certified by Teagasc to be an equivalent qualification under subsection (6), will have to pay the duty chargeable but may obtain a refund of the duty paid provided the conditions set out below are complied with.

(11)(c) The Revenue Commissioners will repay the duty paid by the transferee where the educational qualification is obtained within 4 years of the date of execution of the instrument of transfer. The claim for repayment must be made within the period of 4 years from the date the person obtains the educational qualification (see section 159A(1)) and the following condition must also be satisfied:

• the farmer, or each of them if there is more than one, must, for a period of 5 years from the date on which the claim for repayment is made to the Revenue Commissioners, spend not less than 50 per cent of his or her normal working time farming the land and retain ownership of the land.

The Revenue Commissioners will accept the date of the award of the qualification as the date the person became holder of that qualification.

(12)(a) The relief may be clawed back where there is a disposal or part disposal of land, to which relief applied, within 5 years from the date of execution of the instrument or, as the case may be, from the date the claim for repayment is made to the Revenue Commissioners, and any proceeds from the disposal are not re-invested in other land within one year from the date of such disposal. The clawback is the amount determined by the following formula—

where—

• S is the amount of stamp duty which would have been charged on the instrument, in the first instance, had relief not applied to the instrument or, as the case may be, the amount of stamp duty that was charged on the instrument and later repaid,
• V is the market value of all the land, in respect of which relief applied, immediately before the disposal or part disposal of the land, and
• N is the amount of proceeds from the disposal, or part disposal, of the land that was not re-invested in acquiring other land.

(12)(b) Interest is payable on the clawback at the rate of 0.0219 per cent for each day (see section 159D) from the date of disposal, or part disposal, of the land to the date the penalty is paid.

(12)(c) Where a disposal of land is by way of gift, that the market value of the land disposed of, at the date of the disposal, is deemed to be the proceeds from the disposal. Where property is received in exchange for a disposal of land, the market value of such property, at the date of the disposal, is deemed to be proceeds from such disposal. In a case where that property is land or includes land, the market value of that land, at the date of the disposal, is deemed to have been invested in acquiring other land.

(12)(d) Where there are several part disposals of land, the aggregate of any clawbacks imposed cannot exceed the stamp duty that would have been charged, in the first instance, on the instrument, had the relief not applied or, as the case may be, that was charged on the instrument and later repaid where a claim for repayment was made to the Revenue Commissioners.

(12)(e) Any person who furnishes a false declaration or who includes a false certificate in the instrument will be liable to a penalty of an amount equal to 125% of the duty that would have been charged on the instrument, in the first instance, had all the facts been truthfully declared and certified together with interest at the rate of 0.0219 per cent for each day (see section 159D) from the date the instrument was executed to the date the penalty is paid.

(12)(f) Where a claim for repayment has been made to the Revenue Commissioners, any person who furnishes a false declaration will be liable to a penalty of an amount equal to 125% of the duty that was charged on the instrument, in the first instance, (but later repaid), together with interest at the rate of 0.0219 per cent for each day (see section 159D) from the date the claim for repayment was made to the Revenue Commissioners to the date the penalty is paid.

(13)(a) In the event that one joint owner disposed to another joint owner or a young trained farmer creates a joint tenancy with his or her spouse or civil partner then the disposal will be deemed to have taken place under the deed of conveyance or transfer which first conveyed or transferred the lands into the names of the joint owners or the young trained farmer. This is an anti-avoidance measure to ensure that the clawback provisions will continue to apply in the event that further disposals take place.

Because the relief is claimed back in the guise of a clawback, there is no need to return the instrument for re-stamping.

In a clawback situation each joint owner is held jointly and severally liable for payment of the penalty. However the number of penalties and/or the amount of the penalties to which an individual may be liable is limited as follows:

• (13)(b) a person will not be liable to more than one penalty under subsection (12)(e).
• (13)(c) & (d) if a person has paid a penalty under subsection (12)(e) or (f) then any clawback payable under subsection (12)(a) will be limited to the extent of the penalty paid under subsection (12)(e) or (f) and vice versa.

(14) The transitional arrangements for qualifications attained under section 81 before 25 March 2004 are the following:

• (14)(a) & (b) Where the person is the holder of a qualification from Schedule 2, or an equivalent qualification as certified by Teagasc, and
  • where the qualification is one that requires satisfactory attendance at a course of training in farm management, the aggregate duration of which exceeded 80 hours, that person will be deemed to be the holder, for the purposes of section 81AA, of a qualification corresponding to one set out in subsection (4)(b)(i),
  • where the qualification is one that does not require a course of training, approved by Teagasc, that person will be deemed to be the holder, for the purposes of section 81AA, of a qualification corresponding to a Level 6 Advanced Certificate in Agriculture in paragraph 1 of Schedule 2B.
• (14)(c) Where the person has satisfactorily attended full-time a course at a third-level institution in any discipline for a period of not less than 2 years’ duration, as provided for in section 81(1)(b)(ii)(I), that person will be deemed, for the purposes of section 81AA, to have achieved the required standard for entry into the third year of a full-time course of 3 or more years’ duration at a third-level institution in any discipline, as confirmed by that institution – see subsection (5)(a).
• (14)(d) Where the person is the holder of a certificate issued by Teagasc certifying satisfactory attendance at a course of training in farm management, the aggregate duration of which exceeded 80 hours, that person will be deemed, for the purposes of section 81AA, to be the holder of a certificate awarded by FETAC for achieving a minimum stipulated standard in assessments completed, in a course of training approved by Teagasc in farm management, the aggregate duration of which exceeded 80 hours.
• (14)(e) Where the person is the holder of a certificate issued by Teagasc certifying satisfactory attendance at a course of training in either or both agriculture and horticulture, the aggregate duration of which exceeded 180 hours, that person will be deemed, for the purposes of section 81AA, to be the holder a certificate awarded by FETAC for achieving a minimum stipulated standard in assessments completed in a course of training approved by Teagasc in either or both agriculture and horticulture, the aggregate duration of which exceeded 180 hours.

(15) The following transitional arrangements for qualifications obtained under section 81A on or after 25 March 2004 and before 2 April 2007 apply. Where a person holds a Schedule 2A qualification or a qualification certified by Teagasc as corresponding to a Schedule 2A qualification, and an 80 hours or, as the case may be, an 180 hours certificate is not required in respect of that qualification, that person will be deemed, for the purposes of section 81AA, to be the holder of a qualification corresponding to a Level 6 Advanced Certificate in Agriculture in paragraph 1 of Schedule 2B.

(16) The relief applies to instruments executed on or after 2 April 2007 and on or before 31 December 2015.

Relevant Date: Finance Act 2014