Agri relief re inheritance

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rainbow pen

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As a non farmer what percentage of inherited farm land do you need to lease out to a farmer to comply with the rules to get agri relief? Say for example you have 80 acres, can you decide not to put 10 acres under lease.
 
rainbow pen said:
As a non farmer what percentage of inherited farm land do you need to lease out to a farmer to comply with the rules to get agri relief?
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It all has to be farmed either by the owner or by a qualifying lessee.

If in doubt, get professional advice. The relief is valuable and can be entirely lost very easily if something is missed.
 
T McGibney said:
can be entirely lost very easily if something is missed.
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Can you expand on this a little @T McGibney. I would have assumed that the agri relief is hard coupled to the farm. This is of potential interest but I am completely uninformed on the topic.

appreciate any light you can shed on the topic.
 
Just to be clear is it possible not to apply for agri relief on the 10 acres and still get agri relief on the 70 acres or are you refused all agri relief if you dont inlude all the land on the lease?
 
rainbow pen said:
Just to be clear is it possible not to apply for agri relief on the 10 acres and still get agri relief on the 70 acres or are you refused all agri relief if you dont inlude all the land on the lease?
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I would have presumed like T Mc above that if you were not going to farm the land, all of it would have to be leased to an active farmer.

However, I looked at the Revenue Guidance and there is a Q&A where Revenue state:

"provided that substantially the whole of the agricultural property that was inherited is leased. Revenue will accept that substantially the whole of the property means at least 75% of the property by value."
See page 15 here:


Assuming it's just land we are talking about and you lease 70 of the 80 acres (87.50% of the agricultural property), perhaps the above could be relevant?

Don't mess around though. Get a professional familiar with the ins and outs of this relief.
 
I was looking into this agricultural relief and the key thing that stuck out was the 80% rule: after inheritance 80% of your assets must be agricultural to qualify for this relief.
I would guess in your case after you carve off the 10 acres the remaining 70 acres would still need to represent 80% or more of your personal net worth. As I understood it as long as the land that you claim the relief on is leased within some time frame then you qualify.

I am in a similar position but won't qualify under the 80% rule. I'm hoping to apply for business relief for land that is already leased. Would be great to hear from someone who has done this. As I understand it it's beneficial to apply a high valuation on the land so that when you finally get to sell it (if ever) you won't be liable for too much CAT.
 
T McGibney said:
Not possible unfortunately.
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Is this certain? I was encouraged by this stating that it may be possible: https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-reliefs/agricultural-relief/index.aspx.

The land was leased for a long time before the owner died. Given that there is a long term lease on it at a certain rent it would not sell for near the same price as freely available land. It appears to meet the criteria as the land is not being flipped for development. In https://www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part12.pdf there is a simple example where an inherited farm qualifies for business relief. In any case I am going to seek advice but I'd love to hear someone else's experience.
 
T McGibney said:
You've provided a link to Agricultural Relief while mentioning above that you're interested in claiming Business Relief.

Which is it?
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The first document I linked contains a statement that says: "If the agricultural property comprised in your gift or inheritance does not qualify for Agricultural Relief, it may qualify for Business Relief."

But thanks anyway.
 
In terms of "valuation date", I understand this will usually mean the date of probate (for a will or intestacy). Is this correct?

If someone has a chunk of cash so that they will not meet the asset test, and they are able to get a look at the will before probate, could they in theory buy other land before probate is taken out in order to meet the asset test?
 
aam123 said:
In terms of "valuation date", I understand this will usually mean the date of probate (for a will or intestacy). Is this correct?
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Depends on the circumstances.
aam123 said:
If someone has a chunk of cash so that they will not meet the asset test, and they are able to get a look at the will before probate,
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Sounds unlikely?
aam123 said:
could they in theory buy other land before probate is taken out in order to meet the asset test?
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In theory yes. If this query relates to an real-life situation, get robust tax advice asap as the financial consequences of qualifying or not qualifying for agricultural relief can be colossal.
 
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