Inheritance tax

[kerimf]

Hello everybody,
I am basically an idiot for understanding business and tax policies and know next to nothing about inheritance tax and schemes.

I will be looking at in the future inheriting a fairly large tillage farm in north kildare (600 acres) with and adjacent large house.
I understand bits like X amount of inheritance is untaxed then Y amount is at a rate of Z%

Is there any way possible to reduce my inheritance tax or to not have to pay a massive amount in the future on the farm land or house?

I preferably don’t want to have to sell the land as my parents worked hard to build what they have and I know they would be disappointed and I want to have future generations to be able to use it.

Any general advice let me know?

 

[calvingiovanni]

@kerimf If you are inheriting a large farm then you need to look into agricultural relief which will reduce your CAT bill by 90% but you would need to either become a farmer or lease the land to a farmer. But definitely speak to your parents and a financial advisor. As you might need to take steps now in order to qualify when the time comes.

 

[mayz]

@kerimf This would be a good subject to discuss with an accountant, or the solicitor who your parents are using for their estate planning might be able to help. You might be able to avail of the CAT agricultural relief on the land provided it is at least 80% farmland and will continue to be actively farmed (either by yourself personally, or by leasing it to an active farmer).

 

[tony58]

@kerimf You can claim Agricultural Relief if you farm the land on a commerical basis yourself for at least 50% of your normal working hours for the next 6 years after inheritance, or if you lease it to a farmer for the next 6 years after inheritance.

This will reduce the taxable value of the land by 90%, provided the farmland makes up 80% of the value of the inheritance.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-reliefs/agricultural-relief/index.aspx

 

[pastormoazzam]

@kerimf There's nothing you can do.

Your parents can do a few things to reduce the tax Burdon, but it would need to be done years before they die. If they're still around, they need to seek a financial advisor, not Reddit.

 

[tony58]

@pastormoazzam You may need to revise that opinion.

 

[dtp]

@kerimf Nothing you can do. The only way to dodge inheritance tax financially is if it is willed to you and the family member die. But if its your mam or dad and your a son/daughter you shouldn't have to pay an inheritance tax. There is a clause or catch on land / property but I'm not sure what that is sorry

 

[danieltham103]

@kerimf Assuming you are inheriting from your parents. They can gift you 3 grand per parent per year without it having any implication for your inheritance tax threshold. If you are married they can gift the same sum to your spouse. So that is 12 grand a year in total they can gift to you and your spouse. This might whittle down the taxable sum you eventually inherit.

 

[call_me_tom]

@danieltham103 600 acre farm at (guesstimate) €10k per acre for agricultural purposes is €6 million. The family would have some job to use the SGE of €3k pa to avoid any meaningful tax implication. Agricultural Relief might be a more realistic way to reduce overall tax burden when transferring agricultural land to a beneficiary.

 

[djbartu]

@kerimf If you don't qualify for agri relief look into business relief - similar relief and less restrictive