Vol. 547 No. 1
435 Mr. Penrose asked the Minister for Finance the procedure involved in valuing assets for the purpose of inheritance in a farming situation; if it is possible to re-value such assets as inherited, if it is discovered that they were undervalued; and if he will make a statement on the matter. [2409/02]
It is assumed in the context of the question that the Deputy is referring to capital acquisitions tax agricultural relief. Capital acquisitions tax agricultural relief on the inheritance of a farm is a very significant relief which allows the value of agricultural property received by gift or inheritance to be reduced for the purposes of calculating CAT by 90%. It is intended to apply specifically to farmers and consequently applies only where the beneficiary's assets are 80% or more made up of agricultural assets after the gift or inheritance. Qualifying agricultural assets include land, buildings, livestock and machinery.
The relief cannot be claimed by individuals inheriting non-agricultural property, although business relief may be claimable in such circumstances if the relevant business relief conditions are met. As regards valuation, I am informed by the Revenue Commissioners that the value of agricultural property in the case of an inheritance depends on the market value of property. The market value is the price which, in the opinion of the Revenue Commissioners, such property would fetch if sold on the open market on the date on which it is to be valued and subject to such conditions as might reasonably be calculated to obtain for the vendor the best possible price.
Where it is discovered that property has been undervalued, then revised documentation, including an additional inheritance tax return together with any outstanding tax and interest, should be presented to the capital taxes division of the Revenue Commissioners. In certain circumstances the undervaluation may give rise to a surcharge.
