Inheriting land, 50% time spent farming?

Jurgen Klopp

I am in process of getting the will done after my dad died. 32 acres and I am still keeping the cows as well doing all the normal farming bits etc as well as informing the department I wish to continue the GLAS scheme

I was looking up the €320,000 tax free limit, the agricultural relief as well and while I intend to keep farming this condition of you need to spend 50% of your time farming

But how exactly is this proven, like I'd need a job off farm to keep going with such a small farm

How exactly do you prove this 50%

wrangler

Jurgen Klopp wrote: »

I am in process of getting the will done after my dad died. 32 acres and I am still keeping the cows as well doing all the normal farming bits etc as well as informing the department I wish to continue the GLAS scheme

I was looking up the €320,000 tax free limit, the agricultural relief as well and while I intend to keep farming this condition of you need to spend 50% of your time farming

But how exactly is this proven, like I'd need a job off farm to keep going with such a small farm

How exactly do you prove this 50%

I don't think you're correct in that, have you a link.
It wouldn't be difficult to get the farm and stock valued lesss than 320000 and you wouldn't need to avail of agri relief

Jurgen Klopp

Jurgen Klopp wrote: »

I am in process of getting the will done after my dad died. 32 acres and I am still keeping the cows as well doing all the normal farming bits etc as well as informing the department I wish to continue the GLAS scheme

I was looking up the €320,000 tax free limit, the agricultural relief as well and while I intend to keep farming this condition of you need to spend 50% of your time farming

But how exactly is this proven, like I'd need a job off farm to keep going with such a small farm

How exactly do you prove this 50%

Have you the green cert done?

An accountant who specialises in farm accounts would be your best bet.

oxjkqg

If you work 40 hours a week, you have to demonstrate you also do 20 hours farming!
half hour in the morning, 1.5 hours in the evening 5 days a week is 10 hours
10 hour day on a saturday,
Makes up the 20 hours..

blackbox

oxjkqg wrote: »

If you work 40 hours a week, you have to demonstrate you also do 20 hours farming!
half hour in the morning, 1.5 hours in the evening 5 days a week is 10 hours
10 hour day on a saturday,
Makes up the 20 hours..

That's 20 out of 60 - i.e. one third.

dmakc

blackbox wrote: »

That's 20 out of 60 - i.e. one third.

It's confusingly worded alright but I have got clarification it means 50% of your normal work hours spent farming. So if you work 40 hours in an offic etc. you need to work another 20 on the farm

wrangler

wrangler wrote: »

It wouldn't be difficult to get the farm and stock valued lesss than 320000 and you wouldn't need to avail of agri relief

You are needlessly using up most/all of your 320k threshold then, there may be other gifts or inheritance as well as the land or coming down the line that would require more tax free amounts. Madness to not avail of agri relief.

Also you really want to get the land valued as high as possible not low as agri relief requires 80% of your assets to be agricultural so if you have other assets (less outstanding mortgage etc) or cash that would be worth more than 20% of the value of the farm you are in bother. All cash into your wives name only is the first thing to do.

You can also do the green cert in the next 4 years after inheriting and still avail of the relief.

That being said I'm not sure they will ever check, I availed of another relief that has the 50% rule, I never had to prove it and for the amount of land in my name it would be a very hard sell to claim I was spending 50% of my time working it along with a very busy long hours job that requires me to travel to other offices away from home etc (in normal times).

Bass Reeves

Ashley Rancid Stalker wrote: »

You are needlessly using up most/all of your 320k threshold then, there may be other gifts or inheritance as well as the land or coming down the line that would require more tax free amounts. Madness to not avail of agri relief.

Also you really want to get the land valued as high as possible not low as agri relief requires 80% of your assets to be agricultural so if you have other assets (less outstanding mortgage etc) or cash that would be worth more than 20% of the value of the farm you are in bother. All cash into your wives name only is the first thing to do.

You can also do the green cert in the next 4 years after inheriting and still avail of the relief.

That being said I'm not sure they will ever check, I availed of another relief that has the 50% rule, I never had to prove it and for the amount of land in my name it would be a very hard sell to claim I was spending 50% of my time working it along with a very busy long hours job that requires me to travel to other offices away from home etc (in normal times).

Another advantage of over valuing land is if you ever sell it or are involved in CPO in years to come. However in this case the advantages may be marginal.

Mooooo

Jurgen Klopp wrote: »

I am in process of getting the will done after my dad died. 32 acres and I am still keeping the cows as well doing all the normal farming bits etc as well as informing the department I wish to continue the GLAS scheme

I was looking up the €320,000 tax free limit, the agricultural relief as well and while I intend to keep farming this condition of you need to spend 50% of your time farming

But how exactly is this proven, like I'd need a job off farm to keep going with such a small farm

How exactly do you prove this 50%

Condolences on your dad's passing. Best bet would be an agri accountant. They would have plenty experience with this. However if the farm is being kept as an on going concern it shouldn't be an issue

wrangler

Ashley Rancid Stalker wrote: »

You are needlessly using up most/all of your 320k threshold then, there may be other gifts or inheritance as well as the land or coming down the line that would require more tax free amounts. Madness to not avail of agri relief.

Also you really want to get the land valued as high as possible not low as agri relief requires 80% of your assets to be agricultural so if you have other assets (less outstanding mortgage etc) or cash that would be worth more than 20% of the value of the farm you are in bother. All cash into your wives name only is the first thing to do.

You can also do the green cert in the next 4 years after inheriting and still avail of the relief.

That being said I'm not sure they will ever check, I availed of another relief that has the 50% rule, I never had to prove it and for the amount of land in my name it would be a very hard sell to claim I was spending 50% of my time working it along with a very busy long hours job that requires me to travel to other offices away from home etc (in normal times).

Are you sure about that, your father can leave you 320000 tax free, but Ithink your mother can also leave you 320000 tax free as well and then your uncle /aunt can leave you 32000 tax free then as well

wrangler

wrangler wrote: »

Are you sure about that, your father can leave you 320000 tax free, but Ithink your mother can also leave you 320000 tax free as well and then your uncle /aunt can leave you 32000 tax free then as well

No, it’s 335k (currently) from both parents combined in the group A threashold. Aunts and uncles fall into the group B threashold which is only 32.5k combined from all aunts and uncles etc.

Bass Reeves

wrangler wrote: »

Are you sure about that, your father can leave you 320000 tax free, but Ithink your mother can also leave you 320000 tax free as well and then your uncle /aunt can leave you 32000 tax free then as well

No the allowances are thresholds and group aggregates apply. You can receive 320k from your parents combined, this threshold would also apply if treated as a favourite nephew. The 32k threshold is from all aunts and uncles brothers and sisters. When you reach the threshold all further gifts are taxable

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-aggregation-rules.aspx

wrangler

Ashley Rancid Stalker wrote: »

No, it’s 335k (currently) from both parents combined in the group A threashold. Aunts and uncles fall into the group B threashold which is only 32.5k combined from all aunts and uncles etc.

Have you a link to that, I've failed to find it, many years ago I got the max from both parents separately

wrangler

Bass Reeves wrote: »

No the allowances are thresholds and group aggregates apply. You can receive 320k from your parents combined, this threshold would also apply if treated as a favourite nephew. The 32k threshold is from all aunts and uncles brothers and sisters. When you reach the threshold all further gifts are taxable

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-aggregation-rules.aspx

I'm wrong so, friends tell me I got away with robbery with my CGT on my CPO too.
It wasn't in the IFA meetings I got educated on all the tax tricks but around the tables at lunchtime . Some farmers are very clever.

Bass Reeves

Bass Reeves wrote: »

No the allowances are thresholds and group aggregates apply. You can receive 320k from your parents combined, this threshold would also apply if treated as a favourite nephew. The 32k threshold is from all aunts and uncles brothers and sisters. When you reach the threshold all further gifts are taxable

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-aggregation-rules.aspx

Less the yearly 3k small gifts exemption which is per person and per year.

Bass Reeves

wrangler wrote: »

I'm wrong so, friends tell me I got away with robbery with my CGT on my CPO too.
It wasn't in the IFA meetings I got educated on all the tax tricks but around the tables at lunchtime . Some farmers are very clever.

TBF years ago everything was on paper. There was no PPS demanded by revenue, returns were often taken at face value and often not done at all if thresholds were not reached.

Now solicitors/ make a return to revenue of inheritance gifts, off the amount involved and the pps number of the inheritor. Revenue write out to inheritor to make a CGT tax return and pay any tax involved. You have to show all previous inheritance's. Up until the late nineties early noughties revenue did not do this so unless you were audited for other tax it was unlikely you be caught. As well allowances were higher and have been changed since it was harder to reach thresholds. Another factor is as families are smaller nowadays we are reaching where threshold come into play more. An aunt or uncle leaving inheritance now may only go to a small number of nieces/nephews compare to maybe 20 years ago

Jurgen Klopp

Thanks all, I really appreciate people taking time out of their day to help.

No I have no green cert or relevant qualification. My only option is the part time which seems to be 1 full day plus 1 evening each week for 18 months I'm not sure it's possible as I'd be on 3pm to 11pm Monday to Friday so couldn't do the evening. I can't do the online version as I don't have a level 6

I will check with Teagasc and see who they might rec me to enquire with.

I think I'd be safe with the 335k threshold but my main fear is with a recession now due to covid it will be dropped again, it was dropped to 225k last recession

The only other thing I can see is renting it out on a 6 year lease to someone who's got the qualifications

Jurgen Klopp

Jurgen Klopp wrote: »

Thanks all, I really appreciate people taking time out of their day to help.

No I have no green cert or relevant qualification. My only option is the part time which seems to be 1 full day plus 1 evening each week for 18 months I'm not sure it's possible as I'd be on 3pm to 11pm Monday to Friday so couldn't do the evening. I can't do the online version as I don't have a level 6

I will check with Teagasc and see who they might rec me to enquire with.

I think I'd be safe with the 335k threshold but my main fear is with a recession now due to covid it will be dropped again, it was dropped to 225k last recession

The only other thing I can see is renting it out on a 6 year lease to someone who's got the qualifications

I think maybe try to get some advise on how the closely the 50% working time is policed. It is very difficult if not impossible to prove either way so I have a feeling they don't look into it much if at all.

The renting it out for 6 years isn't a terrible option either and better than not getting the relief though if you are interested in farming the land it's probably not very appealing either.

Grueller

Jurgen Klopp wrote: »

Thanks all, I really appreciate people taking time out of their day to help.

No I have no green cert or relevant qualification. My only option is the part time which seems to be 1 full day plus 1 evening each week for 18 months I'm not sure it's possible as I'd be on 3pm to 11pm Monday to Friday so couldn't do the evening. I can't do the online version as I don't have a level 6

I will check with Teagasc and see who they might rec me to enquire with.

I think I'd be safe with the 335k threshold but my main fear is with a recession now due to covid it will be dropped again, it was dropped to 225k last recession

The only other thing I can see is renting it out on a 6 year lease to someone who's got the qualifications

Where are you based? Colaiste an Atha, Kilmuckridge, Co Wexford do a part time Green Cert.
2 evenings a week from 6.30 to 9.30 and five Saturdays for two years. Classes run for the academic year only. Saturdays are practical skills demonstrations. It is a seriously viable option if you are within an hours drive.

Base price

Jurgen Klopp wrote: »

Thanks all, I really appreciate people taking time out of their day to help.

No I have no green cert or relevant qualification. My only option is the part time which seems to be 1 full day plus 1 evening each week for 18 months I'm not sure it's possible as I'd be on 3pm to 11pm Monday to Friday so couldn't do the evening. I can't do the online version as I don't have a level 6

I will check with Teagasc and see who they might rec me to enquire with.

I think I'd be safe with the 335k threshold but my main fear is with a recession now due to covid it will be dropped again, it was dropped to 225k last recession

The only other thing I can see is renting it out on a 6 year lease to someone who's got the qualifications

I stand corrected but the €335 threshold will apply in your case as your dad passed away during the time it was applicable too, iykwim.

Base price

Base price wrote: »

I stand corrected but the €335 threshold will apply in your case as your dad passed away during the time it was applicable too, iykwim.

Yes you are correct, you use the thresholds applicable on the day of gift/inheritance even if going back years.

Jurgen Klopp

Ashley Rancid Stalker wrote: »

Yes you are correct, you use the thresholds applicable on the day of gift/inheritance even if going back years.

My dad died on Christmas Eve 2018 the threshold was 320k. Solicitor said to get it valued date of death

Does this mean I'll be accessed at the 320k so? This would be a great relief

I am in Clare and was looking and it said agri land is going between 9-11k an acres so was basing worst case scenario of 11k an acre, it should come down due to some boggy acres

In case anyone wondered, I am only doing it now as I had to save up money to do it all over the last year and bit

Jurgen Klopp

Jurgen Klopp wrote: »

My dad died on Christmas Eve 2018 the threshold was 320k. Solicitor said to get it valued date of death

Does this mean I'll be accessed at the 320k so? This would be a great relief

I am in Clare and was looking and it said agri land is going between 9-11k an acres so was basing worst case scenario of 11k an acre, it should come down due to some boggy acres

In case anyone wondered, I am only doing it now as I had to save up money to do it all over the last year and bit

It’s not necessarily the date of death of your dad, have a look at the link below and it should explain the different ways a valuation date is established.

https://www.revenue.ie/en/gains-gifts-and-inheritance/valuation-date-and-the-value-of-certain-benefits/what-is-the-valuation-date.aspx

Jurgen Klopp

Jurgen Klopp wrote: »

My dad died on Christmas Eve 2018 the threshold was 320k. Solicitor said to get it valued date of death

Does this mean I'll be accessed at the 320k so? This would be a great relief

I am in Clare and was looking and it said agri land is going between 9-11k an acres so was basing worst case scenario of 11k an acre, it should come down due to some boggy acres

In case anyone wondered, I am only doing it now as I had to save up money to do it all over the last year and bit

A good accountant is worth every penny in the long run. They’ll be most familiar with the nitty gritty. The main thing is not to do anything in a hurry. The accountant will know an auctioneer who would be familiar with farm sales and valuations. Remember, it may be possible that you’re eligible for agriculture relief, but ALL your assets have to be taken into consideration. You are right to speak to Teagasc.
Good Luck.

Jurgen Klopp

Ashley Rancid Stalker wrote: »

It’s not necessarily the date of death of your dad, have a look at the link below and it should explain the different ways a valuation date is established.

https://www.revenue.ie/en/gains-gifts-and-inheritance/valuation-date-and-the-value-of-certain-benefits/what-is-the-valuation-date.aspx

Ok thanks Nox. All I know is the solicitor who is dealing with the will said to get it valued at its value on his date of death

893bet

blackbox wrote: »

That's 20 out of 60 - i.e. one third.

You end up in a paradox if you add it that way....

So you should do 30 then to 50% but then it’s 30 plus 40=70hrs? So I need to do 35 farming?

So then it’s 35 +40 hrs ....which equals 75 but half of 75 is.....

Jurgen Klopp

[Deleted User] wrote: »

A good accountant is worth every penny in the long run. They’ll be most familiar with the nitty gritty. The main thing is not to do anything in a hurry. The accountant will know an auctioneer who would be familiar with farm sales and valuations. Remember, it may be possible that you’re eligible for agriculture relief, but ALL your assets have to be taken into consideration. You are right to speak to Teagasc.
Good Luck.

Thanks Mary. I actually have nothing to my name bar 10k I saved and a handy Toyota lol

893bet

Jurgen Klopp wrote: »

Thanks all, I really appreciate people taking time out of their day to help.

No I have no green cert or relevant qualification. My only option is the part time which seems to be 1 full day plus 1 evening each week for 18 months I'm not sure it's possible as I'd be on 3pm to 11pm Monday to Friday so couldn't do the evening. I can't do the online version as I don't have a level 6

I will check with Teagasc and see who they might rec me to enquire with.

I think I'd be safe with the 335k threshold but my main fear is with a recession now due to covid it will be dropped again, it was dropped to 225k last recession

The only other thing I can see is renting it out on a 6 year lease to someone who's got the qualifications

There is a fully online version in Westport college.

It’s pure ****e but gets the qualification.

Jurgen Klopp

I found this in Revenue, this is something good anyways, my main fear was being caught with a lower threshold, so it seems I always would have been on the 320k

The tax free group thresholds and rates of tax that apply when you receive:
- a gift are determined by the date of the gift (and not the valuation date)
- an inheritance are determined by the date of death (and not the valuation date)

Jurgen Klopp

893bet wrote: »

There is a fully online version in Westport college.

It’s pure ****e but gets the qualification.

Seriously, oh God thank you I am off to check

Thanks so much everyone I suffer from anxiety so you've no idea how much you all have helped me

893bet

There is a couple of Saturdays needed for exams and practicals over the 12 months it takes.

Jurgen Klopp

893bet wrote: »

There is a couple of Saturdays needed for exams and practicals over the 12 months it takes.

Actually did you do it? I'm just wondering about the lectures of the two nights via distance learning. Does it have to be watched live or could you watch them the next day I wonder

893bet

Jurgen Klopp wrote: »

Actually did you do it? I'm just wondering about the lectures of the two nights via distance learning. Does it have to be watched live or could you watch them the next day I wonder

There are no recordings so live is only option.

Attendance not mandatory but there are shed loads of assignments and they usually go through them line by line almost and ask you do do them as ye go in the class.!

I did this and pretty much did every assignment on the spot. No stress. To try and go back and do them in your own time would be non value add!

It is not difficult. I often dialled in from the car on way home from work or usually in the kitchen while cooking dinner, feeding child etc.

893bet

893bet wrote: »

There is a fully online version in Westport college.

It’s pure ****e but gets the qualification.

I thought that was similar to the teagasc distance education one and required a min level 6 (or a trade) in something else to be eligible.

893bet

Ashley Rancid Stalker wrote: »

I thought that was similar to the teagasc distance education one and required a min level 6 (or a trade) in something else to be eligible.

I think it does. I just kind of assumed the OP would qualify on that regard.