If the son passes the "farmer" test - more than 80% of his assets after the transfer are classed as agriculture assets - then the value of the property transferred is reduced by 90% for CAT purposes. The cumulative value of any gifts received from his parents since Dec 1991 is then compared to the CAT Group I threshold of around 460,000 euro and the excess, if any, is charged at 20%. Credit is given to any tax paid on prior gifts.
If the farm is transfered as a gift, then the donor ie father, may have a CGT liability. If so, this can be used to offset the CAT liability calculated