Basic Income Support for Sustainability (BISS ) (previously known as BPS Entitlements) CAP 2023-2027
Entitlements will be sold or Leased at a multiple or percentage of the NEW BISS 2023 net unit value.
It has been confirmed by DAFM that the 2027 value of entitlements will the same as the 2026 rate.
BISS 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. BISS Entitlements can be leased or purchased and activated on eligible lands that you intend to plant trees on.
ADVANTAGES FOR LEASING ENTITLEMENTS IN 2023 :
1:THE COST OF LEASING ENTITLEMENTS 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 2023 :
A: AN EXAMPLE WHY A FARMER WOULD LEASE OUT ENTITLEMENTS IN 2023
FARMERS RENTING EXPENSIVE LAND NEED TO LOOK AT LEASING 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
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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 A PERCENTAGE 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 2023
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 2023
A FARMER MAY NOT BE ABLE TO ACTIVATE ALL OF HIS ENTITLEMENTS IN 2023 AND HAS THE OPTION OF LEASING OUT ANY NUMBER OF ENTITLEMENTS.
IF A FARMER DOES NOT ACTIVATE ALL HIS ENTITLEMENTS 2022 & 2023, 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
REASONS FOR LEASING OUT BISS ENTITLEMENTS FOR 1 YEAR, SEPARATE TO LAND THAT IS LEASED OUT ON A LONG TERM
- THERE IS A MUCH GREATER DEMAND FOR LAND WITHOUT ENTITLEMENTS IE: LAND WITHOUT ENTITLEMENTS MAKES MORE MONEY PER ACRE
- THE OWNER OF THE BISS ENTITLEMENTS CAN LEASE OUT THE BISS ENTITLEMENTS SEPARATE TO THE LAND.
- IF HE DOES SO, THE OWNER OF THE BISS ENTITLEMENTS NEED NOT WORRY WHETHER THE LEASEE WILL HAND OVER THE BISS PAYMENT
- THE LEASEE SHOULD RECEIVE BISS 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 GREAT FLEXIBILITY LEASING OUT BISS ENTITLEMENTS 1 YEAR AT A TIME.
IT GIVES THE OWNER OF THE BISS ENTITLEMENTS THE OPTION TO SELL THEIR BISS ENTITLEMENTS IN FUTURE YEARS..
IT ALSO MEANS THAT THE OWNER OF THE BISS ENTITLEMENTS CAN ACTIVATE THE BISS ENTITLEMENTS THEMSELVES ON DIFFERENT LAND IF CIRCUMSTANCES CHANGE NEXT YEAR.
Did you know?
POINTS TO TAKE NOTE OF
1:One advantage to Leasing over buying 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 2023 are NOT subject to claw-back 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 in February for 2023, 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.
There is NO clawback on the sale of entitlements in 2023
This means that a farmer can sell up to 100% of their entitlements without any claw-back or loss to the national reserve.
In 2023 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.
The BISS unit value of entitlements in 2023 will be approx 62% of the value of the entitlements in 2022
NOTICE 2023 Transfer of Entittlements On Line Application
ALL APPLICATIONS MUST BE SUBMITTED ON-LINE
IT WILL NOT BE POSSIBLE TO TRANSFER ENTITLEMENTS BY WAY OF LEASE OR SALE WITHOUT BEING REGISERED ON AGFOOD.IE
IT WILL NOT BE POSSIBLE FOR A FARMER TO PURCHASE OR LEASE IN ENTITLEMENTS 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 2023
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
LATEST INFORMATION RE LEASING ENTITLEMENTS IN 2023
https://cap-calculators.apps.rhos.agriculture.gov.ie/payments
This calculator is made available for guidance only. By using this calculator, you agree that Joseph Naughton Ltd and his staff shall not be held responsible in law in relation to the content, information, output or conclusions arising from the use of this calculator by any party. The information contained in this calculator is provided as an aid to farmers in understanding the calculation of entitlement values and the results should not be regarded as providing definitive entitlement values for the period 2023-2026.
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 AFTER SPEAKING TO HIM .
NO RESPONSIBILITY WILL BE TAKEN BY JOSEPH NAUGHTON TO LEASE OUT OR SELL ENTITLEMENTS 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
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 2023
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
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.
Re 2023 Basic Income Support for Sustainability (BISS )
BISS ENTITLEMENTS THAT WERE NOT ACTIVATED IN 2022 MUST BE ACTIVATED IN 2023 OR THEY MAY BE LOST TO THE NATIONAL RESERVE WITH NO COMPENSATION TO THE OWNER OF THE ENTITLEMENTS.
THESE BISS ENTITLEMENTS CAN BE ACTIVATED BY LEASING THEM OUT OR SELLING TO AN ACTIVE FARMERS IN 2023
IT IS VERY IMPORTANT THAT ALL FARMERS ENSURE THAT ALL THEIR BISS ENTITLEMENTS ARE ACTIVATED IN 2023
FARMERS WILL RECEIVE STATEMENT ON THEIR BISS APPLICATION FORM NOTIFYING THEM OF ENTITLEMENTS NOT ACTIVATED IN 2022. THESE ENTITLEMENTS MUST BE ACTIVATED BY WAY OF LEASE OR LAND FOUND TO ACTIVATE THEM IN 2023 OR THEY WILL BE LOST TO THE NATIONAL RESERVE IN 2023 WITH NO COMPENSATION TO THE FARMER.
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.