Potential inheritance tax enquiry

P

Planningahead

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Hi

I am likely to inherit my parents 40 acre farm which is worth approx 320,000

I know the current (2015) tax threshold is 225,000 so worst case scenario I would pay (I think) 30% of (320,000-225,000) being 95,000 *.30 = €28,500

I know that sounds like I should be grateful but I've paid my fair share of tax over 30 years so quiet happy to legitimately reduce this as much as I can.

I'm aware of the 90% Agricultural relief i.e. if , after the inheritance, 90% of my assets are in Agriculture then I am effectively exempt.

So now to my assets: I rent so don't own a home. I am aged 44. I have savings of €205,000 which is all in banks etc. and a pension fund worth €245,000

My question is does this €205,000 cash savings get counted for the 90% Agricultural assessment? (I am presuming my pension fund does not).

If it doesn't then (I think) I would be exempt as 90% of my "assets" would be in Agriculture whereas if the €205,000 saving does count I am goosed as then less than 90% of my asset's would be in Agriculture?

I am open to correction on all of the above but that's my best understanding.

Many thanks.
 
Given the amount of money at stake would you not spend a few hundred getting proper personal tax advice that takes into account all your details? Any advice here will not be complete (unless you give us your full life story) and shouldn't be fully relied upon.
 
hi Yes that makes sense and I will be doing that but wanted to check in advance to be informed as I could. Many thanks
 
As a general point, you could convert your other assets into farming assets at the date of valuation to ensure you meet the 90% mark. Given they're already in cash that should be fairly straightforward?
 
Teagasc have produced a good leaflet on this issue
[broken link removed]

I'm not convinced you have a clear understanding of the 90% rule and would suggest you get some professional advice.
 
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