farming (tax)

maestroamado

In want a bit of advise.
A person wants to change the use of land (5 acres) from intense agriculture to agroforestry with native Irish species. The intention is to have organic sheep (we think) live in this habitat.


My question is what are the tax implications as regard to doing this?
I would expect that even on a good year the profit likely be no much more than €1,000.
It would likely be too much bother to do this if this income needed to be declared for tax purpose.
The person currently has no farming interests and will have to apply to department for flock/herd number if they decide to go this route.


Any advise appreciated...

Mooooo

Income is income regardless of where it comes from. So if there is 1k profit from that and 30k from another source you'll be taxed on 31. More to it than that but if making a profit it's your total income will be counted

Dinzee Conlee

maestroamado wrote: »

In want a bit of advise.
A person wants to change the use of land (5 acres) from intense agriculture to agroforestry with native Irish species. The intention is to have organic sheep (we think) live in this habitat.


My question is what are the tax implications as regard to doing this?
I would expect that even on a good year the profit likely be no much more than €1,000.
It would likely be too much bother to do this if this income needed to be declared for tax purpose.
The person currently has no farming interests and will have to apply to department for flock/herd number if they decide to go this route.


Any advise appreciated...

If you are running this as a commercial activity, then I imagine you should submit tax returns. If this is a hobby, I imagine you wouldn't need to submit returns?
You might find the first few years that you make a loss - maybe getting setup with fencing, water, etc...
If making a tax return this loss can be offset against other income. (You do have to show a profit every now and then, it cant be loss making the whole time)

There is a premium for agroforestry, the annual payments are tax free as far as I know...
It might not suit you, with the various rules around species, etc - but maybe something to consider.
https://www.teagasc.ie/crops/forestry/grants/establishment-grants/agroforestry/

J.O. Farmer

Dinzee Conlee wrote: »

If you are running this as a commercial activity, then I imagine you should submit tax returns. If this is a hobby, I imagine you wouldn't need to submit returns?
You might find the first few years that you make a loss - maybe getting setup with fencing, water, etc...
If making a tax return this loss can be offset against other income. (You do have to show a profit every now and then, it cant be loss making the whole time)

A loss making hobby won't need a tax return but if you are earning an income then you should be making a tax return and paying tax regardless of whether you call it a hobby or not.

That said plenty of people in all walks of life earn income and I'm not sure all of it is declared.

wrangler

J.O. Farmer wrote: »

A loss making hobby won't need a tax return but if you are earning an income then you should be making a tax return and paying tax regardless of whether you call it a hobby or not.

That said plenty of people in all walks of life earn income and I'm not sure all of it is declared.

How are PAYE monitored, they're only taxed on their salary. Self employed have to submit everything..... if you even don't spend enough on living expenses they smell a rat.
I know a guy and I know he makes more in his spare time than working and no remarks past. He was rumored to have lost a lot of money that his wife wasn't even aware of in a robbery and he had to keep schtum.
He's in the public sector so has plenty free time, 100+ days at weekends and 30 days holidays

J.O. Farmer

wrangler wrote: »

How are PAYE monitored, they're only taxed on their salary. Self employed have to submit everything..... if you even don't spend enough on living expenses they smell a rat.
I know a guy and I know he makes more in his spare time than working and no remarks past. He was rumored to have lost a lot of money that his wife wasn't even aware of in a robbery and he had to keep schtum.
He's in the public sector so has plenty free time, 100+ days at weekends and 30 days holidays

Nevermind PAYE, there's people on the PUP doing nixers.

maestroamado

Dinzee Conlee wrote: »

If you are running this as a commercial activity, then I imagine you should submit tax returns. If this is a hobby, I imagine you wouldn't need to submit returns?
You might find the first few years that you make a loss - maybe getting setup with fencing, water, etc...
If making a tax return this loss can be offset against other income. (You do have to show a profit every now and then, it cant be loss making the whole time)

There is a premium for agroforestry, the annual payments are tax free as far as I know...
It might not suit you, with the various rules around species, etc - but maybe something to consider.
https://www.teagasc.ie/crops/forestry/grants/establishment-grants/agroforestry/

This is what is applied for....


Thanks alot for good information by all.


This is the plan so it is likely the plan is a non-runner as too much hassle setting up as a farmer if there is tax returns.