Inheritance Over Lifetime and Farm Relief

Sonic the Shaghog

So long story short. Had my father died in December 2018 and I inherited land worth 166k and the threshold was 320k

At the time I put for farm relief as I farm it and did it cause down the line I was to get the family home and in case there was other bits my mam would leave to me.

She died December 2023 and the threshold was 335k and all I inherited was the house at 160k

I'm wondering if I wanted to sell house and farm how this works with two different thresholds?

I know the farm relief can be claimed back if I sell within a 7 year period. But I'm wondering seeing as I am under the threshold do I actually owe anything anyways?

I assume it's 320-166= 154k

Then does the 154k get bumped another 15k cause my mam passed under the higher threshold giving me a 169k remaining for the house at 160k?

Sorry if this is confusing.

SureYWouldntYa

The inheritances fall under Capital Acquisitions Tax and you have the reliefs under the Group A thresholds as you identified for CAT.

Separately when you look to sell you will be subject to Capital Gains Tax.

CGT will be assessed on the increase (or decrease) in value between inheritance value and the sale value. Unfortunately this has nothing to do with the Group A thresholds under CAT even if there is threshold remaining.

CGT will be due at 33% on the gain, e.g. if the house sells for €200k, there is a gain of €40k. Costs of sale can also reduce any gain, lets say these were €10k. There is also an annual exemption of €1,270, reducing the taxable gain to €28,730 which will be taxed at 33% meaning a liability of €9,481.

namenotavailablE

Are you asking about the clawback of the agricultural relief granted in 2018 as opposed to the potential CGT issue? Based on the values indicated, the clawback wouldn't trigger a tax collection assuming that you had the full Group A threshold available (i.e. hadn't received taxable capital gifts from your parents prior to 2018).

That clawback rule applies if you sell the land within 6 years of inheriting it and don't use some/all of the sales proceeds to acquire more agricultural assets. There are additional rules applying if the land is 'development land'.

See pages 12-15 of this manual for some examples:

https://www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part11.pdf