Minimising Inheritance Taxes

S

shej

Registered User
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Hi,
A query for my cousin, he is due to inherit a family farm valued approximately 800k (land, stock, buildings etc.) from his father; mother deceased. He works in public sector married one child and lives abt 50km from farm. He doesn't hold any farming qualifications and would intend to rent farm on his fathers passing. When he retires he then would probably farm the land himself,
His father is well at present and he is wondering what should he do to minimise any tax liability on inheritance; from current threshold of 280k, I was calculating a liability of 800- 280= 520; 30% CGT = 156K, at that liability he would have to sell farm - he doesn't want to do this (the pull of the land etc., 5th generation farm). As I asked any way of minimising this liability
Tks J & F
 
I think there is a discount valuation system that applies to farm value before tax is applied.
 
Check out Agricultural Relief.

Your cousin can inherit land and get a reduction of 90% of the value for CAT purposes of he rents it to a full time farmer. No CAT. Uncle should get Retirement relief. No CGT.

Any future disposal the base cost is the full market value. No CGT on thy portion.

Stamp duty will apply.

Why would anyone pay capital taxes?
 
He needs to talk to some professional, preferably a tax consultant. As Joe says, you can avail of the Agri Relief, but to be sure to be sure, you need to reduce other assets, ie transfer all to wife.
 
Hi,
Based on the 90% relief, is it just a case of reduction of 90% of €800k = €80k, then this €80k would be under the 280k inheritence threshold?
 
If the relief applies fully, then yes. But there is nuance and there are conditions to be adhered to. Quality advice is required.
 
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