Agricultural Relief

Agricultural relief applies in respect of both gift tax and inheritance tax and operates by charging the tax on a reduced market value or ‘agricultural value’ of the particular agricultural property. This means the market value is reduced by 90%.

It should be noted that this calculation isn’t necessarily equivalent to charging CAT on 10% of the market value as deductions from the (90%) reduced agricultural value may be allowed in respect of certain items.

If you inherit or receive a gift of agricultural property that doesn't qualify for Agricultural Relief, it may qualify for Business Relief.

To qualify for the relief, the following conditions must be satisfied:  

• The property/assets received must constitute ‘agricultural property’ (as defined) at the date of the gift or at the date of death, in the case of an inheritance.

• They must also constitute ‘agricultural property’ on the valuation date if this differs from the date of the gift or inheritance. The beneficiary must satisfy the ‘80% agricultural property’ test on the valuation date after taking the property/assets.

• The beneficiary, or lessee where the beneficiary leases the agricultural property, must satisfy the various ‘active farmer’ requirements.

To qualify as agricultural property it can be:

• Agricultural land, pasture and woodland situated in the European Union

• Crops, trees and underwood growing on such land

• Farm buildings and dwelling houses (and the land) that are proportionate in size and character to the requirements of the farming activities

• Farm machinery situated on the property

• Livestock and bloodstock on the property

• European Union ‘single farm payment' entitlements

• Milk quotas where transferred with agricultural land (Revenue practice) Market gardens, ‘factory’ farms used for intensive rearing/production and fish farms do not constitute agricultural property unless they are part of the agricultural land. However, they may qualify for a similar type of relief known as ‘business relief’

The agricultural value of a gift or inheritance of agricultural property is 10% of its total market value. A similar calculation is applied to deductions, which can include costs and expenses.

You can use Revenue's Online Service (ROS) to claim Agricultural Relief through your IT38 return: