Tax Info / Tax Summary / Capital Acquisition Tax

Capital Acquisitions Tax comprises Gift Tax, Inheritance Tax and Discretionary Trust Tax. Gift tax is charged on taxable gifts taken (other than on a death) on or after 28 February, 1974 and Inheritance Tax is charged on taxable inheritances taken (on a death) on or after 1 April, 1975. A once-off Inheritance Tax applies to property subject to a discretionary trust on 25 January, 1984, or becoming subject to a discretionary trust on or after that date.

The standard rate of tax is 33% in respect of gifts and inheritances taken on or after 6th December 2012.

For the purpose of Gift and Inheritance Tax, the relationship between the person who provided the gift or inheritance (i.e. the Disponer) and the person who received the gift or inheritance (i.e. the beneficiary), determines the maximum tax-free threshold - known as the "group threshold".

Note: (Date of death or date of gift indicates the relevant year for the correct indexed amount).

Benefits taken on or after  6 December 2012

• Threshold amount Nil
• Balance 33%

Benefits taken between 7 December 2011 and 5 December 2012

• Threshold amount Nil
• Balance 30%

Benefits taken between 8 April 2009 and 6 December 2011

• Threshold amount Nil
• Balance 25%

Agricultural Relief has been available for gift and inheritance tax since the introduction of Capital Acquisitions Tax in 1976. The relief has been increased significantly in recent years.

The relief operates by reducing the market value of 'agricultural property' * by 90%, so that gift or inheritance tax is calculated on an amount - known as the 'agricultural value' - which is substantially less than the market value.

Conditions for the relief

In general, the relief applies provided the beneficiary qualifies as a farmer.

The Beneficiary qualifies as a ‘farmer’ if on the valuation date the beneficiary’s agricultural property comprises 80% of the beneficiary’s total property at the valuation date.

Measures contained in the 2014 Finance Act

In addition to the existing conditions, the following conditions also apply to gifts or inheritances taken on or after 1 January 2015 where the valuation date also arises on or after 1 January 2015.

The beneficiary must:

• Farm the agricultural property for a period of not less than 6 years commencing on the valuation date or
• Lease the agricultural property for a period of not less than 6 years commencing on the valuation date. The agricultural property may be leased to a number of lessees as long as each lease and lessee satisfies the conditions of the relief.

In addition, the beneficiary (or the lessee, where relevant) must:

• Have an agricultural qualification or
• Farm the agricultural property for not less than 50% of his or her normal working time.

The agricultural property must also be farmed on a commercial basis and with a view to the realisation of profits.

What is 'Agricultural Property'?

For Gifts and Inheritances taken on or after 20th November, 2008 'Agricultural property' means:

• agricultural land, pasture and woodland situated in a Member State of the European Union*
• crops, trees and underwood growing thereon
• houses and other farm buildings appropriate to the property; and
• livestock, bloodstock and farm machinery thereon.
• A payment entitlement (within the meaning of Council Regulation (EU) No. 1782/2003 of 29 September 2003)

For Gifts and Inheritances taken prior to 20th November, 2008 the definition of Agricultural Property included land, pasture and woodland situated in the State only.

To qualify for the relief the gift or inheritance must consist of agricultural property both at the date of the gift or inheritance and at the Valuation Date. The Valuation Date is the date at which the property is valued for gift/ inheritance tax purposes.