Macra national president, Catherine Buckley, has said that changes to income averaging for Milk Production Partnerships, which was announced by the Minister for Finance in the Budget last week, will facilitate farmers who were income averaging for tax purposes to enter partnerships without being liable for additional tax. This anomaly, along with other partnership short fallings, was highlighted in Macra’s pre-Budget submission. Ms Buckley said that in the past, farmers on income averaging entering into Milk Production Partnerships were subjected to costly reviews. This was because of increased assessments on what was deemed a cessation of farming activity as a sole trader, when in fact it was a continuation of trade. Therefore farmers entering partnership had to cease income averaging and were generally liable for additional tax after entering the partnership. Ms Buckley said that in order to encourage young farmers to enter farm partnerships it was important to remove obstacles and restrictions on farmers involved in partnership. ‘Any farmer entering partnership should not be at a disadvantage relative to farming on their own,’ she said. Ms Buckley also said that farmers who own land under a joint arrangement and who now decide to divide or redistribute their agriculture assets will no longer liable for Capital Grains Tax as a result of changes in the Budget.