Consultant warns there may be higher tax on inherited farm land

INHERITED farm land valued at €1m could cost up to €70,000 in tax if hinted increases occur, said a senior IFAC tax consultant.

Declan McEvoy, speaking at a seminar on farm inheritance on Wednesday, cited the example of “a house worth €200,000 with farm assets of €800,000.” Assuming agricultural relief goes to 60%, this would result in a tax liability on the farm transfer on gift tax of approximately €45,000. In the 2011 budget, the Government reduced the property duty to 1% on the first €1m and 2% on anything above that. If the Government goes a similar route in farming, that would result in a further €25,000 in tax. The Commission on Taxation has made two recommendations on farming that could come into effect in the next budget:

- A reduction in agricultural relief from 90% to 75%.