Going to Inherit Farm

Tell Me This

I am going to inherit farm from my dad. He has most of it leased out on long term lease and it will probably wait that way even after inheritance. In order to get herd no in my name down the track is there anything in the line of courses i should be doing now?

barnaman

You need to do the Green Cert as soon as can. You could probably even get a place this year, starts this month, as believe some still around costs €2500 and takes 25 or 28 days over 18 months. Not needed to get a herd number but needed for tax etc. Talk to a good Ag advisor and accountant best money you will ever spend.

Tell Me This

Thanks barnaman. Hearing of alot of people doing green certs lately. If i wont be farming land why do i need to do one?

The Cuban

I think their may be Tax implications when inheriting a leased out farm, you may not qualify for agricultural relief

barnaman

Inheritance tax lad. To get ag relief on inheritance you need to be an active farmer so spend 50% time or more farming and heard recently you will need to be registered for tax as a farmer first and then have a pt job ie a lad registered as a plumber for tax have a hard time convinving revenue that he spends 50% of time farming. The Revenue say that a ft job is 40 hours so need show spend 20 hours a week farming. I am a ft farmer so my occupation is registered as a farmer. Or have a green cert and farm commercially ie making a profit. Then no requiremt show how much time spend farming

Jb1989

If it's father to son transfer there will be very little tax. Big tax exists with far out family members and buying land of strangers, not parent to child, although the there is a cap of a couple of hundred thousand before a tax can appear

Tell Me This

Ok thanks folks.

Timmaay

Tell Me This wrote: »

Thanks barnaman. Hearing of alot of people doing green certs lately. If i wont be farming land why do i need to do one?

If your not going to be farming the land and have no interest in doing so then you will have to cough up the inheritance tax as if it was a normal asset being handed down (tax free until something around 250k maybe?). If you do the green cert purely to avail of the tax exemptions then it's questionable if it is tax evasion, however quite a difficult one to prove.

barnaman

Jb1989 wrote: »

If it's father to son transfer there will be very little tax. Big tax exists with far out family members and buying land of strangers, not parent to child, although the there is a cap of a couple of hundred thousand before a tax can appear

There would be plenty of tax, €250,000 the limit parent to child or roughly that google it to get exact figure. That leaves the remainder taxed at one third. in parts of the country that means the son could only get 25 acres before paying maybe few hundred thousand on the rest if not meet ag reflief. for land transfer between living people still need ag qualification to get lower stamp duty etc .

barnaman

Timmaay wrote: »

If your not going to be farming the land and have no interest in doing so then you will have to cough up the inheritance tax as if it was a normal asset being handed down (tax free until something around 250k maybe?). If you do the green cert purely to avail of the tax exemptions then it's questionable if it is tax evasion, however quite a difficult one to prove.

You have to farm the land for 6 years after getting it to get the ag relief so no question of tax evasion can or will arise. Its not a case of simply having the qualification on the day. The lad can rent it to an active/qualified farmer for 6 years and still get the relief

Jb1989

barnaman wrote: »

There would be plenty of tax, €250,000 the limit parent to child or roughly that google it to get exact figure. That leaves the remainder taxed at one third. in parts of the country that means the son could only get 25 acres before paying maybe few hundred thousand on the rest if not meet ag reflief. for land transfer between living people still need ag qualification to get lower stamp duty etc .

Yea that's roughly right,
I knew there was a cap on up the scale,
Depends on size of posters holding and the evaluation per acre to determine the limit for non tax, 2500000 could be 20 acres or 30 acres depending on valuation

barnaman

By way lads Teagasc rently published a decent sixed booklet on this matter. Picked one up last week but its somewhere in the jeep! should have answers on a lot of this.

Tell Me This

Thanks for the replies. The land would continue to be leased to an active farmer. In this case would there be any need for me to do a green cert.

Also is there an age limit to do a green cert.

barnaman

No and No!

To be honest if you are not going farming and can lease the land then no point doing the green cert.

If you do think you might farm at some stage advise you to do it. No age limit but do it before you are 40 to be a qulified young farmer which had various benefits. You can lease the land tax free but have to pay PRSI and UCS on the lease up to €40,000 income tac free if 15 year lease and €20,000 if 5 year lease

mayota

Talk to an agricultural accountant. Is the land being transferred to you by your father? He may not qualify for retirement relief if he wasn't farming the land the last 10 years.

barnaman

Been a lot of changes in this area (retirement and transfer) in latst budget. For 2015 they are for a 1 year period being more generous in transfers etc but as Mayota says consult an ag advisor. Also read the below.

Guide to Farming Taxation Measures in Finance Act 2014

893bet

barnaman wrote: »

There would be plenty of tax, €250,000 the limit parent to child or roughly that google it to get exact figure. That leaves the remainder taxed at one third. in parts of the country that means the son could only get 25 acres before paying maybe few hundred thousand on the rest if not meet ag reflief. for land transfer between living people still need ag qualification to get lower stamp duty etc .

Isnt their 90% relief on the asset value depending on a number of factors (% of total assets the farm will make up, active farmer status, willingness to lease to an active farmer etc).