Inheriting land from a far out relative

Zeebsisgone654

Recently a family member discovered he would be receiving almost 150 acres from a 2nd cousin that died unexpectedly, he had no idea he was getting the place until the will was opened, what kind of taxes would he be facing

Geuze

Zeebsisgone654 wrote: »

Recently a family member discovered he would be receiving almost 150 acres from a 2nd cousin that died unexpectedly, he had no idea he was getting the place until the will was opened, what kind of taxes would he be facing

CAT

https://www.revenue.ie/en/gains-gifts-and-inheritance/gift-and-inheritance-tax-cat/index.aspx

Stationmaster

Zeebsisgone654 wrote: »

Recently a family member discovered he would be receiving almost 150 acres from a 2nd cousin that died unexpectedly, he had no idea he was getting the place until the will was opened, what kind of taxes would he be facing

Tell him get financial advice straightaway as there will be cash flow issues for him due to the low thresholds for CAT.

lalababa

Talk to an accountant! There would be a few ins & outs!
There are certain agricultural and other reliefs but without these they would be paying : valuation being x, ( (x-32,500)/100 )* 33.
So if x was 500,000 CAT would be 154,275.

mickdw

If agricultural relief can be claimed, the value will be reduced to 10 percent and tax applied to that making it very manageable. If not, the bill would be horrendous.

Zeebsisgone654

Thanks everyone for the helpful advice, I will recommend him to go to an accountant, he is a bit overwhelmed as this was totally unexpected

patsy_mccabe

You can also claim Business Relief. It's similar to Agri Relief. If he decides to farm the land, then tax due will be ZERO.
Talk to a tax specialist but you can also research yourself on Revenue.ie.

Stamp duty is the other tax to consider.

wrangler

patsy_mccabe wrote: »

You can also claim Business Relief. It's similar to Agri Relief. If he decides to farm the land, then tax due will be ZERO.
Talk to a tax specialist but you can also research yourself on Revenue.ie.

Stamp duty is the other tax to consider.

He'd be only allowed inherit 300000 tax free as in group B and that's even if they were being generous, by right he'd be group C and only entitle to about 150000 tax free.

Group B
A parent, brother, sister, niece, nephew, grandparent, grandchild, lineal ancestor or a lineal descendant of the disponer.

Group C
People with a relationship to the disponer not already covered in Groups A B

patsy_mccabe

wrangler wrote: »

He'd be only allowed inherit 300000 tax free as in group B and that's even if they were being generous, by right he'd be group C and only entitle to about 150000 tax free.

Group B
A parent, brother, sister, niece, nephew, grandparent, grandchild, lineal ancestor or a lineal descendant of the disponer.

Group C
People with a relationship to the disponer not already covered in Groups A B

Will he not qualify for business relief?

skooterblue2

He should also look into doing a green cert. I think you can do it part time, if you have prior learning (1 year done on a level 6 cert in science or a trade).

Zeebsisgone654

I should say he already my relative already farms and has significant farm assets. He has an appointment made with a reputable accountant after today

trg

patsy_mccabe wrote: »

You can also claim Business Relief. It's similar to Agri Relief. If he decides to farm the land, then tax due will be ZERO.
Talk to a tax specialist but you can also research yourself on Revenue.ie.

Stamp duty is the other tax to consider.

Business Relief may not be applicable.

Stamp Duty not an issue when it's an inheritance

Zeebsisgone654

Zeebsisgone654 wrote: »

I should say he already my relative already farms and has significant farm assets. He has an appointment made with a reputable accountant after today

Make sure that the accountant is experienced in farming accounts. If you need a recommendation, feel free to PM me.

Donald Trump

From what I recall, you can avail of agri relief as long as you first satisfy the asset requirements (I think it is that 80% of your total assets after inheriting are agricultural) plus either you satisfy the other conditions (education etc) yourself OR rent it out to someone who does for 6 years.

If you do that then the value of the inheritance gets effectively cut to 10%. So if you inherited 150 acres, you will pay CAT effectively as if you only inherited the value of 15.

Panch18

Zeebsisgone654 wrote: »

I should say he already my relative already farms and has significant farm assets. He has an appointment made with a reputable accountant after today

Good, hopefully he will be able to avail of the Agri relief and have little to pay

There is nothing worse than seeing an inheritance sold to pay bloody tax

He’s a lucky man to get that amount of land and it to be unexpected. It’s like a lotto win!! Best of luck to him

Lime Tree Farm

A residence on the land would have implications with taxation (as in being the owner of a second house)

toleratethis

A tax advisor is who they need to go and see. A lot of "accountants" are just lads who are able to fill in your returns. Be careful.