Relief they may qualify for Business Relief.
Either relief will have the effect of reducing the value of the agricultural property (but excluding the farm house in the case of Business Relief ) being transferred by 90pc thereby rendering a gift of less than €3.1m in value free of Gift Tax.
The asset test requires that at least 80pc of the gross market value of all of one’s possessions, including the relevant gift or inheritance, must comprise agricultural property.
Loans or debts are not deductible with the exception of your principal private residence mortgage. The test is applied on a once-off basis on the date of the transfer
The post transfer usage test in the case of Agricultural Relief can be satisfied if any of the following conditions are met; ÷Farm the land as an active farmer for a minimum period of six years, You do not have to have a farm training qualification but you must farm for 50pc or more of your normal working time. If during the six-year period you decide to lease the land, relief will not be withdrawn, provided the lease/ lessee satisfies the requirements for the relief for the remainder of the six-year period. ÷Be a qualified farmer, i.e., hold a Green Cert or equivalent (or acquire one within four years of the gift or inheritance date) and farm the land for a minimum period of six years. In this instance you are not required to farm the land for 50pc or more of your normal working time. ÷Lease the land to an active farmer or to a qualified farmer as defined above. The lease must be for a minimum period of six years and there can be a number of lessees if necessary provided each lessee satisfies the requirements. A lease can be to a company but the main shareholder must be a working director and must farm the agricultural property on behalf of the company.
The post transfer usage test in the case of Business Relief can be satisfied if the farm is taken over and farmed as a going concern for six years.
In this case the transferee does not have to be a qualified or full-time farmer but un-
He is a partner in O’Sullivan Malone and Company, accountants and registered auditors; website: www.som.ie