Revenue Note for Guidance

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Revenue Note for Guidance

Section 81D Relief for certain leases of farmland

This relief is subject to a commencement order by the Minister for Finance pending resolution of EU State-aid issues. Subject to this, the section, introduced by Section 73 of Finance Act 2014, will exempt long-term leasing of land from stamp duty under the following conditions-

  • The period of lease must be for a term of not less than six years and not greater than 35 years and
  • the land is used exclusively for farming on a commercial basis which includes the occupation of woodland on a commercial basis and
  • the lessee must be a farmer who has (or within a period of 4 years from the date of the lease will be the holder of) a qualification set out in Schedule 2, 2A or 2B to the Act, or a farmer who spends not less than 50% of his or her normal working time farming land (including the leased land).

Revenue will accept for the purposes of this relief that normal working time approximates to 40 hours. This will enable farmers with off-farm employment to qualify for the relief provided they spend a minimum average of 20 hours working per week on the farm. Where anyone can show that their “normal working time” is somewhat less than 40 hours a week, then the 50% requirement will be applied to the actual hours worked – subject to the overriding requirement that the farm is farmed on a commercial basis and with a view to the realization of profits.

The Revenue Commissioners also accept that the relief is available to a lessee who farms the land in partnership or through a company, where the partners/main shareholder who is working director (as appropriate) satisfy the above conditions.

If any of the conditions referred to above cease to be satisfied within the first six years of the lease then the lessee will become liable to the stamp duty together with interest calculated in accordance with section 159D of the Act from the date the condition(s) ceased to be fulfilled to the date the stamp duty is paid. In the event of the lessee dying or becoming incapacitated the clawback of stamp duty does not apply.

Relevant Date: Finance Act 2014