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  #1  
Old 17-05-2008, 09:05 PM
jackswift jackswift is offline
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Default agricultural relief

My brother inherited land from an aunt. He is not a farmer, can he still claim agricultural relief?
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  #2  
Old 17-05-2008, 11:57 PM
Vanilla Vanilla is offline
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Default Re: agricultural relief

If it is an inheritance then you are talking about CAT relief. The test depends on the value of his assets including what he is inheriting. If agricultural assets are over 80% then he can qualify for the agricultural relief. If he does qualify then the value is reduced by 90% for tax purposes. He must remain resident for 3 years and cannot sell for 6 years. There are other provisions but his tax adviser will advise.
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Old 18-05-2008, 09:50 PM
putsch putsch is offline
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Default Re: agricultural relief

Since the question is in the tax forum I'd assume its a q of what is the tax definition of "farmer" for agricultural relief under CAT rules. As I understand it that is solely a requirement that 80% of assets are agricultural. You could be an astronaut or brain surgeon but once 80% of asseta are agrucultural voila - you're a farmer.
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Old 18-05-2008, 10:14 PM
jackswift jackswift is offline
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Default Re: agricultural relief

Quote:
Originally Posted by putsch View Post
Since the question is in the tax forum I'd assume its a q of what is the tax definition of "farmer" for agricultural relief under CAT rules. As I understand it that is solely a requirement that 80% of assets are agricultural. You could be an astronaut or brain surgeon but once 80% of asseta are agrucultural voila - you're a farmer.
I since got more information about ag relief inheritance tax. You must be a farmer to claim it read this.
http://www.citizensinformation.ie/Re...and-exemptions

Plain and simple you cannot claim to be a farmer if you inherit land and have never farmed before.
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  #5  
Old 18-05-2008, 10:18 PM
eamonn22 eamonn22 is offline
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Default Re: agricultural relief

Quote:
Originally Posted by jackswift View Post
My brother inherited land from an aunt. He is not a farmer, can he still claim agricultural relief?
Hiya

Following on from Vanilla's reply - which is correct.

The relevant tax here in Capital Acquisitions Tax because there would not be any CGT or stamp duty on the inheritance.

There is no need to be an actual farmer to avail of agricultural relief from CAT, the test is a test on the assets that your brother holds. As Vanilla pointed out, at the "valuation date" at least 80% of his assets (including those that he is inheriting) need to be agricultural assets. Agricultural land, machinery etc all count as agricultural assets. The legislation was recently changed so that if he owns a house (that is not a farm house) then any mortgage on that house can be taken off the value of that house when calculating his total agricultural/non-agricultural assets.

The most important thing is that even if your brother does not qualify as a "farmer" now, he can qualify by the valuation date if he re-jigs his assets. For example I heard of a situation recently where a wife transferred her family home into the sole name of her husband in order to qualify as a "farmer" for CAT purposes by the valuation date. The valuation date differs for every administration but it can be (at least) a few months after your aunt's death. Depending on the value of the inheritance it would definitely be worth looking into the possibility of your brother "becoming" a farmer by the valuation date.
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  #6  
Old 18-05-2008, 10:47 PM
extopia extopia is offline
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Default Re: agricultural relief

Quote:
Originally Posted by jackswift View Post
I since got more information about ag relief inheritance tax. You must be a farmer to claim it read this.
http://www.citizensinformation.ie/Re...and-exemptions

Plain and simple you cannot claim to be a farmer if you inherit land and have never farmed before.
Helpful link. But I disagree with your interpretation. This is what it says:

To qualify for Agricultural Relief the beneficiary must be a farmer. This means that you must be domiciled in Ireland and, taking the gift or inheritance into account, agricultural property must account for at least 80% of the gross market value of your assets on valuation date. This restriction does not apply if the gift or inheritance is trees or underwood

From Revenue Leaflet IT39
_______

What is a “Farmer”?

Farmer in this context does not refer to the occupation of the beneficiary. Rather, to qualify as a “farmer” a number of conditions
must be met by the beneficiary at the valuation date:
- be an individual (companies do not qualify);
- domiciled in the State;
- at least 80% of the gross market value of whose assets is represented, on the valuation date, by agricultural property -
after taking the gift or inheritance into account.

Note that no test, i.e. farmer percentage test or domicile test, is necessary in respect of a gift or inheritance of trees or
underwood.

A beneficiary who qualifies for agricultural relief must be resident in the State for all of the three tax years immediately following
the tax year in which the valuation date falls or the relief granted will be withdrawn.

____________________________________

So you are a farmer if you are domiciled in Ireland and 80% of your assets are made up of agricultural property. No other qualifications mentioned.
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  #7  
Old 19-05-2008, 03:06 PM
Brendan Burgess Brendan Burgess is offline
 
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Default Re: agricultural relief

Folks

Although the OP was not clear in his question, it is quite clearly about tax relief.

He is not interested in your thoughts on what a farmer is and what REPS is.

Please stick to the topic.

This is quite technical, so maybe avoid replying if you have nothing to say.

Brendan
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  #8  
Old 19-05-2008, 03:33 PM
ubiquitous ubiquitous is offline
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Default Re: agricultural relief

Quote:
Originally Posted by jackswift View Post
Plain and simple you cannot claim to be a farmer if you inherit land and have never farmed before.
This is incorrect.
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  #9  
Old 19-05-2008, 05:12 PM
extopia extopia is offline
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Default Re: agricultural relief

Quote:
Originally Posted by Brendan View Post
Folks

Although the OP was not clear in his question, it is quite clearly about tax relief.

He is not interested in your thoughts on what a farmer is and what REPS is.

I think the tax definition of a farmer (in relation to agricultural relief from CAT) is highly relevant. The OP's brother will qualify for the relief if he fulfills the Revenue's definition of "Farmer".
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