Inheritance Tax for Favourite Nephew/Niece

Mayo1998

Hey there, I understand there's a few topics or topics like this already but hoping to get a few recent or fresh experiences.

Long story short I inherited roughly 20acres a year or two back from my uncle who died suddenly. The land valued at roughly €100,000 means I'll have to pay around €20,000 or over in Tax. There would be a tax relief if the land was worth over 80% of my total assets and I rented the land out over 6 years but unfortunately I do not qualify for this. I have however applied for relief under the favourite Nephew/Niece and my tax advisor is confident I'll be eligible for the relief. To be eligible I must have worked on the land for 15+ hours a week for 5 years before my inheritance. Unfortunately I have no real proof I worked on it only that I did live around him for 3 of the 5 years and some neighbours can vouch that I was around.

The question I have is what proof may the revenue look for and has anyone been in a similar situation to me, did revenue look for proof or did they simple accept the tax return forms. Did they look for proof of working on the farm, wages etc or was your word that your worked there good enough to satisfy them, although I'm not sure that will be good enough.

Cheers for any help, there's a possibility no one on here has been in this situation but said id ask just to see peoples experience when getting tax relief through favourite niece/nephew.

KaneToad

I have no idea but I sincerely hope they don't "take your word" for it. (Not you personally but generally).

Mayo1998

https://www.boards.ie/discussion/comment/121618722#Comment_121618722

Yes I do agree, I get where your coming from. That's what I'm unsure about, I'm not sure how they can ever 100% prove or disprove that I worked the past 5 years on the farm. Would be interesting to see how they went about it with other people who have been through similar.

893bet

What a terrible rule. I understood it allowed the nephew be treated like a child of the disponer.

It does but with a stupid rule attached regarding hours.

I think you worked them OP.

Micey.ie

I was in similar situation about 8 years ago and revenue never looked for any proof.

Mayo1998

https://www.boards.ie/discussion/comment/121619414#Comment_121619414

Yep I did work them unfortunately without much proof, ya it's an unfortunate rule when it comes to something like this. You'd feel an aunt or uncle who owned and farmed the land all there lives would be entitled to leave it to a Nephew or Niece without revenue taking a massive slice but that's life I suppose. I do get tho there trying to limit people with no interest in the land getting there hands on it and making quick money.

Mayo1998

https://www.boards.ie/discussion/comment/121619431#Comment_121619431

Thanks for the reply, that's good to know. Appreciate it!

roosterman71

One thing ya might have, if you did work there, is pictures of things from around the place. You could build up a story then detailing changes made over the years, things you did to help make those changes, memories of things done, etc. There's no way to prove what hours you put in and there's no way to prove you didn't put in the hours either. I think you'd be unlucky to be quizzed, especially when you lived close by. Different ball game if you were a distance away over the last few years and trying to explain how you worked the land while simultaneously living and presumably working a good distance away.

Sonic the Shaghog

Inherited the family farm and went for farm relief option and they never looked for proof on what farm work I did. Just clicked a few buttons and submit and got a letter confirming zero liability.

I'd be wagering you'll go the same way. It's very easy criticise revenue but if they did the the problem is so many children and nieces/nephews spend years toiling away on farms where some oul one still has everything in their name and waits till the last minute or dies before anything. People will say I'm being dramatic but the amount of farms that could easily collapse with people getting tax bills they shouldn't would be mad you've no idea.

I had read the department brought/are planning on a thing where if you hit 60 you need to have a plan submitted to them on who will take over the farm it's such an issue. Not sure what became of it

MrRigsby

Favourite nephew? It sounds like something from the early 1900’s . Inheritance tax rules in this country in general are totally outdated and unfair. The thresholds need to be adjusted upwards as the current one for children is around €335,000 which means most family homes would leave the children inheriting with a substantial tax bill particularly if they are an only child . The OP is inheriting a fairly modest property. I think this sort of thing should be exempt from tax personally

KaneToad

I think inheritance tax should be higher. It just perpetuates generational inequalities. The same people getting the same assistance to accumulate wealth.

Oscar_Madison

So OP- you have a smart phone I imagine and have done now for some years? And carried said phone with you whilst out and about? And that said phone has location data on it doesn’t it?

Better people than me can tell you how to grab some data from that phone that could help support your story - your mobile provider (assuming you’ve had the same one) may also be able to help as they have all of that data and that data is your data so I imagine a data request to them could get it ?

Tefral

https://www.boards.ie/discussion/comment/121624852#Comment_121624852

https://timeline.google.com/

Oscar_Madison

https://www.boards.ie/discussion/comment/121624885#Comment_121624885

Like I said, better people than me 😀 thanks must explore that myself and learn something new

Tefral

https://www.boards.ie/discussion/comment/121624896#Comment_121624896

in a way its kinda scary. Take any day and it has you down to the minute where your devices are.

To answer the OPs question, I know a 2 people who were the favourite nephew and didnt have to produce much more than a letter stating they worked it 2 hours an evening and a saturday. They all lived within 20mins drive of the farm though and while they probably didnt do a consistant number of hours a week, they did work the farms to help their uncles.

Sonic the Shaghog

https://www.boards.ie/discussion/comment/121624844#Comment_121624844

Ya and you know what would happen there for farms at the very least? Majority of small farms end up getting sold off cause they can't compete and eventually you end up with power and wealth concentrated into a tiny amount of super farmers who then become a new elite and/or current vulture funds start buying up massive swaths and build their balances ever bigger and some fat mess from the UK or US gets to live in mansion off the back of it. Buy hey it's brought everyone down to the same level so all's good

Not to mention the nations food security, vast majority of inherited land stays being farmed. If it ended up in the hands of larger groups like companies we either get it parceled off for non farming activities, industrial quality muck food like the US or no doubt they'll sit on it and leave it to do nothing if they were prevented to have their way

Not to mention why bother your arse working it in the first place cause you'll get the arse taxed off it

lmk123

https://www.boards.ie/discussion/comment/121624844#Comment_121624844

Funny how people’s opinions differ, I think inheritance tax is a joke, people work all their lives, manage to save some money after getting robbed with income tax etc., they then leave some money / possessions etc. to someone in the hopes of helping them only for the government to snap up even more of it. It just drives home the point to me that the working person is a fool, maybe it’s just me. I get your point about accumulating generational wealth but I think that’s a small %.

MIKEKC

https://www.boards.ie/discussion/2058331382/inheritance-tax-for-favourite-nephew-niece

Does the fact that you do not qualify under the 80% rule not mean you are out?

Mayo1998

https://www.boards.ie/discussion/comment/121626293#Comment_121626293

It won't if I rent out the land for 6 years + to a person who's assist are 80% farming related. Now I would never sell the land as it's been in the family for years but due to my current circumstances it wouldn't be viable for me to farm the land so renting is the only option that's open to me at the minute.

Mayo1998

That is a fair point, thanks for that. I'll look to gather some history on there and also some old photos 👍

Mayo1998

Thanks for that, hopefully I will be the same 👍

893bet

https://www.boards.ie/discussion/comment/121626293#Comment_121626293

If he qualified as favour nephew his inheritance allowance increases to 335k and he doesn’t need the agri relief.

Note 100k for 20 acres is small.

if not going for agri relief having a high value could be in your favour as long as it’s under the 335k.

Mayo1998

Yes I understand, we did value it low at the start just incase I didn't qualify for any relief. The higher the value at the time the more tax I would have to pay.

MIKEKC

https://www.boards.ie/discussion/comment/121630790#Comment_121630790

That would be fine if he doesn't expect to get any other inheritance that would be g him over 335k limit

893bet

https://www.boards.ie/discussion/comment/121632922#Comment_121632922

Is that a lifetime limit per person?

Mayo1998

https://www.boards.ie/discussion/comment/121633187#Comment_121633187

335K is the lifetime limit for immediate family, I think it's something like 35k for anything else. Should I inherit anything else from an aunt or uncle (which I won't) I would probably have to pay tax on anything worth over 30k or so. Should I inherit something from my parents I do believe that anything worth under 330k should be tax free even after my uncle's inheritance but I could be wrong. My limit might now be around 200k after my uncle's inheritance but as I said I'm not sure

massey 265

https://www.boards.ie/discussion/2058331382/inheritance-tax-for-favourite-nephew-niece

As a poster has already stated 100k for 20 acres seems a low valuation .Be careful not to value the land too low per acre as this can lead to difficulties if down the line you are valueing it again eg for site gift ,sale etc as this could through up a capital gains tax issue if a large difference between the valuations occurs.Imo get it valued correctly to avoid this occurance.

Dr Turk Turkelton

https://www.boards.ie/discussion/comment/121624844#Comment_121624844

Funnily enough a lot of people seem to think like this.

They are normally the people whose parents failed them though.

Mayo1998

Yes it is valued low but some of the land is of poorer quality, not worthy of a site so it's actually not valued very low. I will however revalue it properly tho in the near future.