Tax relief is available on a certain amounts of the monies received from renting out farm land.
The amount of money that can be received tax free will depend on a certain number of factors and conditions being met.
Firstly we will begin with the conditions that must be satisfied so the income will qualify for relief:
- The farm land must be in the state.
- A lease must be written up and evidenced and be for a minimum period of 5 years.
- Must be at an arm’s length i.e. market value and not between close relatives.
- The relief can’t be used to create a loss.
The yearly amounts that can be earned tax free depend on the length of the lease:
(a)The maximum relief is €40,000 a year if there is a lease in place for 15 years or more
(b)€30,000 a year if the lease is for 10 years and less than 15 years.
(c)€22,500 a year if the lease is for 7 but less than 10 years.
(d) €18,000 a year if the lease s for between 5 and 6 years.
There is still Universal social charge & PRSI on this income.
Should you need any further help in relation to relief for the lease of land, please contact a member of our team by emailing firstname.lastname@example.org and one of our agri tax specialists will contact you.