Capital acquisitions tax comprises both gift tax and inheritance tax. Agricultural relief has been available for both gift tax and inheritance tax since the introduction of capital acquisitions tax in 1976. The relief has been increased substantially in recent years. The relief is now a flat 90% reduction in the market value of all agricultural property comprised in the gift or inheritance. Agricultural property means: agricultural land, pasture and woodland in the State; crops, trees and under wood growing thereon; houses and other farm buildings appropriate to the property; and livestock, bloodstock and farm machinery thereon.
To qualify for agricultural relief the beneficiary of the gift or inheritance must be domiciled in the State and at least 80% of the market value of his or her assets must be represented by agricultural property after taking the gift or inheritance. The age of the beneficiary at the date of the gift or inheritance is not relevant for the purposes of the agricultural relief.
Agricultural assets, which do not qualify for agricultural relief because the beneficiary does not meet the conditions of the relief, may separately qualify for capital acquisitions tax business relief. Business relief will apply if the person making the gift or inheritance was carrying on a farming business and had owned the farming business for a minimum ownership period. The minimum ownership period is normally two years in the case of an inheritance and five years in the case of a gift. Business relief is also now a flat 90% reduction in the market value of all business property comprised in the gift or inheritance.
There is a full exemption from stamp duty on the transfer of agricultural land to a farmer who is under the age of 35 years and holds the requisite educational qualifications at the date of execution of the deed of the transfer. This exemption applies to such transfers where the disponer is alive. Stamp duty does not arise in the case of an inheritance.