1. Farming Income Introduction
Farming means farming farm land, that is land in the State wholly or mainly occupied for the purposes of husbandry, other than market garden land (s.654, TCA 1997)
Profits from farming fall within Schedule D Case I
Normal rules of Schedule D Case I apply with the exception of stock relief and income averaging

2. Farming Income Stock Relief – Young Qualifying Farmer
Qualifying conditions:
Be under age 35 at commencement of tax year in which he/she commences farming
Holds recognised certificates or qualifications in farming
Qualify for grant aid under Scheme of Installation Aid for Young Farmers
First became chargeable under Case I from farming in 2008 or subsequent years

3. Farming Income Stock Relief – Young Qualifying Farmer
100% stock relief for 4 years
Reduces to 25% after 4 years
No clawback of relief

4. Farming Income Stock Relief – Young Qualifying Farmer
Applies where closing trading stock is greater than opening trading stock

5. Farming Income Stock Relief – Young Qualifying Farmer
Opening stock at 1/1/15 €20,000
Closing stock at 31/12/15 €25,000
Increase in value of trading stock €5,000
Farming profits for y/e 31/12/15 €7,000
Less stock relief (100%) (€5,000)
Revised farming profits for €2,000

6. Farming Income Stock Relief – Other farmers
Other farmers can claim stock relief of 25% of the increase in value of trading stock

7. Farming Income Stock Relief – Other farmers
Opening stock at 1/1/15 €20,000
Closing stock at 31/12/15 €25,000
Increase in value of trading stock €5,000
Farming profits for y/e 31/12/15 €7,000
Less stock relief (25%) (€1,250)
Revised farming profits for €5,750

8. Farming Income Stock Relief – Restrictions
Stock relief cannot create or augment a loss
Capital allowances cannot create or augment a loss when stock relief has been claimed
Farming losses forward from previous tax years must be utilised in the tax year in which the stock relief is claimed
Unutilised wear and tear allowances from that tax year or carried forward from previous years cannot be carried forward to subsequent years

9. Basis of assessment Farming Income General Rule
The basis period for the year of assessment is the accounting period of 12 months ending in the year of assessment.

10. Farming Income Income Averaging Option to elect for income averaging
Full-time farmers may elect to be charged on the basis of the average of the aggregate farming profits and losses of the 3 years ending in the year of assessment
A farmer must stay on income averaging for a minimum of 3 years
Applies for years of assessment up to 2014

11. Farming Income Income Averaging
Full-time farmers may elect to be charged on the basis of the average of the aggregate farming profits and losses of the 5 years ending in the year of assessment
A farmer must stay on income averaging for a minimum of 5 years
For the 2015 year of assessment and subsequent years

12. Farming Income Income Averaging
A farmer must elect for income averaging by written notice within 30 days of receiving an assessment to tax
Cannot opt for averaging if a loss was made in any of the two prior tax years
Election will remain in force until the farmer either opts out of averaging or ceases to be a qualifying farmer

13. Farming Income Income Averaging
Where farmer opts out of averaging, the immediately preceding tax years’ assessments are reviewed
If they are lower than the final year of averaging they will be revised to equal the final year

14. Farming Income Stallion fees and profits Exempt up to 31 July 2008
Taxable from 1 Aug 2008
Stallions are to be treated as stock in trade
A full write off over 4 years of the initial market value is allowed for tax purposes (25%)
Includes stallions purchased for stud and transferred from racing

15. Farming Income Stallion fees and profits
Upon disposal or death, write off of the balance of the initial market value is given
Applies for stallion owners and members of a syndicate
Losses for syndicates are ring fenced and can only be used against future stallion stud income