Agricultural Relief

Agricultural relief applies in respect of both gift tax and inheritance tax. Under this relief you will be charged at a reduced market value (or 'agricultural value') on the particular agricultural property.

If you qualify, the market value of your agricultural property will be reduced by 90%.

Note: 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.

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

• The property or assets received must constitute 'agricultural property' (defined below) at the date of the gift, or death (in the case of an inheritance)
• They must also constitute 'agricultural property' on the valuation date, if this is different 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 it must 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 claim Agricultural Relief through an IT38 return.

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