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agricultural relief

  • 08-04-2016 8:07pm
    #1
    teach nua
    Registered Users, Registered Users 2 Posts: 108 ✭✭


    I have seen a number of comments in posts on this forum about people being advised by tax advisors/accountants to reduce their personal assets such as homes and saving by transferring these to spouses in order to meet the 80% test for agricultural relief.

    Does anyone know if this is being tax efficient or tax avoidance?

    I asked revenue this question and one office told me it is fine, that the test is just based on your personal assets on the day of valuation.

    Another revenue office told me they did not know and referred me to their acts on tax avoidance without specifically telling me it was tax avoidance They asked me to write in with the question. They said it would take about 6 weeks before I would get a reply due to backlogs.

    In revenue's 'guide to farming taxation measures in finance act 2014' section 3.6 in relation to CAT and agricultural relief refers to active farmers and inheritance tax, which can also be subject to agricultural relief. There is a sentence here which reads 'the existing 80% asset farmer test applies at the valuation date and not the date of inheritance and as such gives a window of opportunity, time wise, for a beneficiary to arrange his or her affairs so as to meet that 80% test' .

    Could 'arranging your affairs' include reducing your personal assets to meet the 80% test?

    One of the conditions of the relief is that the land must be leased for a period of not less than 6 years to a qualified farmer.
    Would renting on a year to year basis to a qualified farmer fulfill this condition?
    (revenue could not answer this one for me either)

    If anyone could share their experiences it would be great as I imagine several of family farm transfers go on everyday.

    I will be seeking professional advice but I think my questions are fairly common

    thanks


Comments

  • #2
    el_gaucho
    Registered Users, Registered Users 2 Posts: 565 ✭✭✭el_gaucho


    teach nua wrote: »

    I asked revenue this question and one office told me it is fine, that the test is just based on your personal assets on the day of valuation.

    We did a transfer a few years ago and were advised the same by the accountant. On the day of the transfer to be precise.


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