WHAT are the possible benefits of passing on agricultural property instead of cash to family? If you are considering gifting assets to your children or other family members, then agricultural tax relief could be available to you. Horse Sense gives a point-by-point guide to eligibility below.

Where an individual receives a gift of land, agricultural relief may apply and allows a reduction of 90% of the market value of these assets subject to the following conditions being met:

Individual assets

  • An individual’s asset must comprise of a minimum 80% agricultural property. Agricultural property includes agricultural land, pasture and woodland situated in a member state of the European Union or in the United Kingdom;

    • - crops, trees and underwood growing thereon;

    - houses and other farm buildings appropriate to the property; and

    - livestock, bloodstock and farm machinery thereon.

    Payment entitlement

  • Individuals must adhere to the active farmer conditions by meeting one of the following;

    • - individuals must have a relevant agricultural qualification and farm commercially

    OR

    - the individual must spend 50% of their working time farming the land commercially

    OR

    - lease the land for a minimum of six years to an individual who is an active farmer, as defined above.

    - There is a clawback of the relief if an individual disposes of the assets within six years and does not replace them or ceases to satisfy the active farmer rules in the six-year period from the date of the gift. There is also the option to gift cash, which if invested in land within two years and the rest of the conditions are satisfied, also qualifies.

    Note: It is recommended that anyone considering this relief should get specific tax advice from a professional.