BPS Entitlements

 

IMPORTANT NOTICE I WISH TO ADVISE THAT I WILL BE CEASING TRADING IN ENTITLEMENTS FOR 2020 AT 5PM WEDNESDAY 13/05/2020

AND TURNING OFF THE PHONES FROM 5PM  13/05/2020

IN ORDER TO SUBMIT TRANSFER OF ENTITLEMENT APPLICATIONS

BEFORE 12 MIDNIGHT ON MAY 15th

   

        

This is to enable me have all Entitlement Trades submitted to the Department for processing by close of Business on Friday 15/05/2020 (Closing Date).

I would like to take this opportunity to thank you all for your continued support over the past few months.

 

OFFICE: 09096 46046 or 090960 31630   MOBILE: 087 2348705  

 

EMAIL  This email address is being protected from spambots. You need JavaScript enabled to view it.                                                                                                                                                                                                               IMPORTANT NOTICE

PLEASE ONLY SELECT JOSEPH NAUGHTON AS ENTITLEMENT TRANSFER FACILITATOR (ETF) TO LEASE OUT OR SELL  ENTITLEMENTS IN 2019 AFTER SPEAKING TO HIM .

NO RESPONSIBILITY WILL BE TAKEN BY JOSEPH NAUGHTON TO LEASE OUT OR SELL ENTITLEMENTS IN 2019 WITHOUT PRIOR CONSENT GIVEN BY HIM TO DO SO.

THE SYSTEM SET UP BY THE DEPARTMENT OF AGRICULTURE ONLY SHOWS THE NAME AND HERD NUMBER, IT DOES NOT SAY IF A FARMER WANTS TO LEASE OUT OR IN OR SELL OR BUY OR NUMBER OF ENTITLEMENTS OR UNIT VALUE OR CONTACT DETAILS FOR THE FARMER.

ALL THESE DETAILS MUST BE GIVEN TO JOSEPH NAUGHTON BY THE HERD OWNER OR AGRICULTURAL CONSULTANT IN ORDER FOR THE TRADE TO BE PROCESSED ON-LINE BEFORE THE DEADLINE OF MAY 15TH 2019 

                                       

Details of how to select Joseph Naughton Auctioneer as ETF
 
Log on to your agfood.ie and click on Direct Payments/BPS Greening tab on left side of screen
 
Top left beside home tab click on applications
Select transfer of entitlements applications
 
brings you to screen with create transfer key, to right of this another green key to authorise/select agent to transfer entitlements on your behalf...click on this
 
select ETF ......type in Joseph Naughton 00005
 
screen will pop up with in & out
 
select number of entitlements IN =(If you are taking in entitlements into your herd by lease or purchase)
 
                                            OUT =(If you are leasing or selling entitlements out of your herd number)
 
below that that select add
You should see "you have authorised Joseph Naughton to transfer entitlements on your behalf."

             NOTICE 2019 Transfer of Entittlements On Line Application 

ALL APPLICATIONS MUST BE SUBMITTED ON-LINE IN 2020

IT WILL NOT BE POSSIBLE TO TRANSFER ENTITLEMENTS BY WAY OR LEASE OR SALE IN 2020 WITHOUT BEING REGISERED ON AGFOOD.IE

IT WILL NOT BE POSSIBLE FOR A FARMER TO PURCHASE OR LEASE IN ENTITLEMENTS IN 2020 WITHOUT BEING REGISTERED ON AGFOOD.IE

 

ALL APPLICATIONS MUST BE SUBMITTED ON-LINE BY THE TRANSFEROR AND ACCEPTED ON-LINE BY THE TRANSFEREE BEFORE THE 15TH MAY 2020.

THIS IS ONLY THE APPLICATION AND THE TRANSFER HAS TO BE PROCESSED BY THE DEPT OF AGRICULTURE BEFORE THE FUNDS CAN BE RELEASED TO THE HERD OWNERS

 

The clawback on the sale of entitlements is to REMAIN AT 20% IN 2019

The cut is in the amount of claw-back applied to the sale of Basic Payment Scheme entitlements without land.

In 2019 It will be possible for farmers to sell and purchase entitlements

In some circumstances it may be a good idea to sell any small number of entitlements that cannot be activated instead of Leasing them out.

Declan McEvoy IFAC Discussing Capital Gains Tax on the farm.

"A common view is that the rate of Capital Gains tax is 33%. This is correct , however there is another rate of Capital Gains Tax at 10% known as Entrepreneur's Relief "

This tax rate can apply to Farmers as well as other individuals. While Farmers do not usually class themselves as business people/ entrepreneurs, once they are carrying on a trade they are able to avail of this relief.

In order to qualify for the relief , the following must apply:

1. What one disposes of must be a qualifying business asset which covers farming as well as other sole traders & companies.

2. The business asset is an asset which has been used for the purpose of the business.

3. You must have owned the asset for a continuous period of 3 out of the last 5 years.

Please contact IFAC or your own accountant to see if selling your entitlements will qualify for this reduced relief

 

                                      LATEST INFORMATION RE LEASING ENTITLEMENTS IN 2019.

 

In order to receive a payment in 2019 on leased in entitlements , the herd owner must be registered on AGFOOD.IE 
 
The application has to received on-line by the Dept of Agriculture before the 15th May 2019
 
This means the herd owner or his agent must log into AGFOOD.IE and accept the transfer of entitlements application before the 15th May 2019
 
It will not be possible to accept the entitlements into a herd after the 15th May 2019

 

 
All Farmers who leased IN entitlements in 2018 with Joseph Naughton Auctioneer  MUST NOTE  that the 2018 entitlement lease ended on  31/12/18
 
 
a  2019 application to Transfer entitlement must be submitted to the Dept of Agriculture on-line before 15th May 2019.
 
PLEASE MAKE CONTACT WITH JOSEPH NAUGHTON AUCTIONEER AS SOON AS YOU HAVE DECIDED TO LEASE IN ENTITLEMENTS IN 2019.
 
THE SOONER THE APPLICATION IS MADE THE BETTER
 

OFFICE: 09096 46046 or 090960 31630   MOBILE: 087 2348705  

EMAIL  This email address is being protected from spambots. You need JavaScript enabled to view it.

 
Farmers are entering the fourth year of the Basic Payment Scheme (BPS) payment mechanism for the period 2016 to 2019. Questions are starting to arise about changes to the two-year use-it-or-lose-it entitlement rule with some farmers in a use-it-or-lose-it situation. 

Payment must be claimed on each entitlement in 2017 or 2018. If not, as it stands, entitlements will be lost to the national reserve. This is said to be adding life into the rental market in some areas at an earlier stage this year, with some farmers keen to move early and be in a position to claim the entitlements themselves rather than have to explore the option of leasing.

Entitlements can be claimed by the applicant or can be claimed through a lease or rental arrangement. Where entitlements were transferred for one year through a short-term arrangement, it is important to note that they will revert to the owner for the 2019 scheme year.

It is also important where entitlements were leased out in 2018 to ensure that they were activated, ie the transferee must declare 1 ha of land to support each entitlement. This takes place between the transferor and the transferee and the Department has no role in these agreements on entitlement usage.

TO DISCUSS FURTHER PLEASE CONTACT : JOSEPH NAUGHTON,

OFFICE: 09096 46046 or 090960 31630   MOBILE: 087 2348705  

EMAIL  This email address is being protected from spambots. You need JavaScript enabled to view it.

The Department of Agriculture has not yet confirmed there will be a National Reserve available to new and young farmers in 2019.

Who can apply?

The National Reserve will provide entitlements for two categories of farmers by priority:

  • Young farmers: BPS applicants under 40 years of age in 2019 who started farming in the last five years.
  • New entrants to farming: BPS applicants who started farming since 1 January 2015 and did not farm in their own name previously.

The Department will make the full terms and conditions of the National Reserve and application forms available online, Please make contact with an agricultural consultant to discuss further.

Re 2019 Basic Payment Scheme Entitlements 

BPS ENTITLEMENTS THAT WERE NOT ACTIVATED IN 2018 MUST BE ACTIVATED IN 2019 OR THEY MAY BE LOST TO THE NATIONAL RESERVE WITH NO COMPENSATION TO THE OWNER OF THE ENTITLEMENTS.

THESE BPS ENTITLEMENTS CAN BE ACTIVATED BY LEASING THEM OUT TO ACTIVE FARMERS IN 2019

IT IS VERY IMPORTANT THAT ALL FARMERS ENSURE THAT ALL THEIR BPS ENTITLEMENTS ARE ACTIVATED IN 2019.

FARMERS WILL RECEIVE STATEMENT ON THEIR BPS APPLICATION FORM NOTIFYING THEM OF ENTITLEMENTS NOT ACTIVATED IN 2018. THESE ENTITLEMENTS MUST BE ACTIVATED BY WAY OF LEASE OR LAND FOUND TO ACTIVATE THEM IN 2019 OR THEY WILL BE LOST TO THE NATIONAL RESERVE IN 2019 WITH NO COMPENSATION TO THE FARMER.

REASONS FOR LEASING OUT BPS ENTITLEMENTS FOR 1 YEAR ,SEPARATE TO LAND THAT IS LEASED OUT ON A LONG TERM LEASE (5 TO 15 YEARS) IN 2019:

  • THERE IS A MUCH GREATER DEMAND FOR LAND WITHOUT ENTITLEMENTS  IE: LAND WITHOUT ENTITLEMENTS MAKES MORE MONEY PER ACRE
  • THE OWNER OF THE BPS ENTITLEMENTS CAN LEASE OUT THE BPS ENTITLEMENTS SEPARATE TO THE LAND.
  • IF HE DOES SO, THE OWNER OF THE BPS ENTITLEMENTS NEED NOT WORRY WHETHER THE LEASEE WILL HAND OVER THE BPS PAYMENT
  • THE LEASEE SHOULD RECEIVE BPS PAYMENT IN OCT- DECEMBER  (THERE IS NO GUARANTEE THAT THE FARMER LEASING IN ENTITLEMENTS WILL GET 100% PAYMENT)
  • THE OWNER OF THE ENTITLEMENTS AS A RULE WILL GET THE % PAYMENT IN THE SUMMER INSTEAD OF OCT-DECEMBER WHICH MAY HELP WITH CASH FLOW
  • THERE IS ONLY 1 YEAR CONFIRMED PAYMENT ON BPS ENTITLEMENTS SO THE DEPARTMENT OF AGRICULTURE CAN ONLY PROCESS THE BPS ENTITLEMENTS FOR 1 YEAR

  • THERE IS GREAT FLEXIBILITY LEASING OUT BPS ENTITLEMENTS 1 YEAR AT A TIME.

    IT GIVES THE OWNER OF THE BPS ENTITLEMENTS THE OPTION TO SELL THEIR BPS ENTITLEMENTS IN FUTURE YEARS..

    IT ALSO MEANS THAT THE OWNER OF THE BPS ENTITLEMENTS CAN ACTIVATE THE BPS ENTITLEMENTS THEMSELVES ON DIFFERENT LAND IF CIRCUMSTANCES CHANGE NEXT YEAR.

BPS Entitlements can be Purchased or Leased for the following reasons:

1. If you have more eligible land than entitlements

2. If you have eligible land rented, leased or purchased

3. BPS Entitlements can be leased or purchased and activated on eligible lands that you intend to plant trees on.

 
 4. To increase your BPS by upgrading your present entitlements.
       
 5 .To generate an asset for the future in  2019 and probably further years.

        

ADVANTAGES  FOR LEASING ENTITLEMENTS IN 2018 :

1:THE COST OF LEASING ENTITLEMENTS IN 2019 IS A TAX DEDUCTIBLE EXPENSE, WHEREAS BUYING ENTITLEMENTS IS AN ASSET AND NOT TAX DEDUCTIBLE.

2:A FARMER LEASING IN ENTITLEMENTS WILL ONLY HAVE TO COME UP WITH A PERCENTAGE OF THE YEARLY PAYMENT INSTEAD OF A MULTIPLE OF THE YEARLY PAYMENT IF HE WERE TO BUY THEM.

3: IF FOR SOME REASON A FARMER HAS LESS ELIGIBLE HECTARES IN FUTURE YEARS , HE DOES NOT HAVE TO LEASE IN ENTITLEMENTS AGAIN.

 

REASONS  FOR LEASING OUT ENTITLEMENTS IN 2019 :

 A: AN EXAMPLE WHY A FARMER WOULD LEASE OUT ENTITLEMENTS IN 2019

FARMERS RENTING EXPENSIVE LAND NEED TO LOOK AT LEASING OUT THEIR ENTITLEMENTS AT A PERCENTAGE OF THE YEARLY PAYMENT.

ONE OPTION FOR FARMERS RENTING EXPENSIVE LAND TO ACTIVATE THEIR ENTITLEMENTS ON IS THEY CAN LEASE OUT THEIR ENTITLEMENTS AT A PERCENTAGE OF THE YEARLY PAYMENT. 

THE PERCENTAGE WILL DEPEND ON THE UNIT VALUE OF THE ENTITLEMENT. THE HIGHER THE UNIT VALUE, THE HIGHER THE PERCENTAGE RATE WILL BE.

TO DISCUSS FURTHER PLEASE CONTACT : JOSEPH NAUGHTON,

OFFICE: 09096 46046 or 090960 31630   MOBILE: 087 2348705  

EMAIL:  This email address is being protected from spambots. You need JavaScript enabled to view it.

  

A FARMER IS RENTING LAND AT €500 per hectare (c.€200 per acre) TO ACTIVATE ENTITLEMENTS WORTH €250 PER HECTARE(c.€100 per acre)

IN OTHER WORDS IT IS COSTING THE FARMER €250 TO ACTIVATE EACH ENTITLEMENT

IF THE FARMER LEASES OUT HIS ENTITLEMENTS HE NEED NOT WORRY ABOUT INSPECTIONS AND GET 55% to 72% OF HIS YEARLY PAYMENT UPFRONT

THE PERCENTAGE WILL DEPEND ON THE UNIT VALUE OF THE ENTITLEMENT. THE HIGHER THE UNIT VALUE, THE HIGHER THE PERCENTAGE RATE WILL BE.

 

B: ANOTHER EXAMPLE WHY A FARMER WOULD LEASE OUT ENTITLEMENTS IN 2019

A FARMER CAN LEASE or RENT OUT HIS ENTITLEMENTS AND LAND SEPARATELY, ON A YEARLY BASIS.

THERE ARE A LOT MORE FARMERS LOOKING TO RENT OR LEASE LAND WITHOUT ENTITLEMENTS THAN THERE ARE FARMERS LOOKING TO RENT OR LEASE LAND WITH ENTITLEMENTS.

I HAVE A LARGE NUMBER OF FARMERS LOOKING TO LEASE IN ENTITLEMENTS  

 

C: ANOTHER EXAMPLE WHY A FARMER WOULD LEASE OUT ENTITLEMENTS IN 2019

A FARMER MAY NOT BE ABLE TO ACTIVATE ALL OF HIS ENTITLEMENTS IN 2019 AND HAS THE OPTION OF LEASING OUT ANY NUMBER OR EVEN A FRACTION OF AN ENTITLEMENT.

IF A FARMER DOES NOT ACTIVATE ALL HIS ENTITLEMENTS IN 2018 OR 2019, THE ENTITLEMENTS NOT ACTIVATED WILL BE LOST TO THE NATIONAL RESERVE WITH NO COMPENSATION TO THE FARMER.

REASONS WHY A FARMER MAY NOT BE ABLE TO ACTIVATE ALL HIS ENTITLEMENTS WOULD BE :

1:IF HE SOLD LAND AND DIDN'T SELL THE ENTITLEMENTS WITH IT

2:IF HE LOST RENTED LAND

3: IF THE AREA OF ELIGIBLE LAND WAS REDUCED AFTER AN INSPECTION

4: IF THEY SOLD SITES

5: IF BUILDINGS OR ROADWAYS WERE ERECTED ON THEIR LAND

 

 CONTACT US ON  09096 46046/ 09096 31630 or  087 2348705 or email This email address is being protected from spambots. You need JavaScript enabled to view it. to DISCUSS YOUR OPTIONS

 

1. 2016 was the first year that Basic Payment Entitlements could be leased without land to anywhere within the Republic of Ireland.

2. There is no roll over of Entitlements which means that any Entitlement unused for two consecutive years will be lost to the National Reserve with no compensation to the farmer.

3. Entitlements sold in 2019 are likely to be subject to a claw-back under the new CAP rules, some exemptions apply.

4.Entitlements can be sold or leased to free up capital to purchase other assets.

5. Entitlements can be leased or sold where a farmer is retiring from farming.

6. Entitlements can be leased or sold where a farmer has sold land and will not be farming in 2019

Did you know?

 

POINTS TO TAKE NOTE OF

1:One advantage to Leasing over buying in 2019 is that LEASING is a tax deductible expense, whereas buying is not tax deductible.

(this should be confirmed with your accountant)

2;There is no roll over of entitlements which means that any entitlement unused for two consecutive years will be lost to the National Reserve.

   Therefore  it is vitally important any entitlements that cannot be activated, for any reason, within the two year period should be leased out or sold otherwise they will be lost to the National Reserve without any compensation to the owner of the entitlements.

3:Entitlements sold in 2019 are likely to be subject to claw-back of 20% under the new CAP rules, some exemptions apply. 

   Please seek advise from your Agricultural Consultant

4: Terms and conditions and Transfer of Entitlement on-line application will open soon, please contact us for further information.

CONTACT US ON  09096 46046/ 09096 31630 or  087 2348705 or email This email address is being protected from spambots. You need JavaScript enabled to view it. to DISCUSS YOUR OPTIONS

 

Disclaimer: Joseph Naughton Auctioneer its employees or officials, accept no liability for any errors or omissions in the information provided

or for any loss or damage occasioned to any person as a result of using the information provided. The information contained 

should not be taken as constituting legal advice. 

 

       

 Listen to MIDWEST RADIO INTERVIEW With Joseph Naughton Auctioneer 

Broadcast Time          Wednesday 2nd April 2014 from 10pm to 11pm. 

 

Listen to Joseph Naughton being interviewed by Gerry Murphy of Teagasc for Midwest Radio's weekly farming programme dealing with all matters agricultural (presenter/producer Michael Neary).  Listen to Joseph answer questions about recent developments around Single Farm Payment Entitlements and leasing Entitlements. 

 To listen go to /http://www.midwestradio.ie then go to schedule, them Farming Matters with Michael Neary and download programme.

 

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