Martin O’Sul­li­van

Irish Independent - Farming - - FINANCE FARMING -

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

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