"Agricultural Value" of lands

Cantab.

Another loophole for the FF hacks to avail of: when transferring your farm to your son/daughter, as long as they are a 'farmer', they only pay inheritence tax on the 'agricultural value' and not the 'market value'.

I know a chap who is doing a crash course in farming with teagasc so he can strengthen his case that he is in fact a 'farmer' when it comes to inheritence tax. Seemingly these week-long residential crash-courses are full of young toffs in mercedes and polo sweaters. You can save yourself literally millions of euro by being a poor 'aul humble farmer.

Fair play to 'em you might say, milk the system for all it's worth (we've certainly been milked by the corruption in the 80s and 90s).

I think I might set up a tomato growing operation in my back garden and get the 'agricultural value' of my parents house transferred to me. Oh but wait, I'm a middle class suburbanite and people like me aren't supposed to know about loopholes like these, now back to your work like a good lad!

In case you think I'm making all this up, see:
http://www.revenue.ie/leaflets/cat5.pdf

Cantab.

Cantab. wrote:

Another loophole for the FF hacks to avail of:

Complete and utter rubbish of the highest order. The concept of relief for people who qualify as farmers on capital acquisitions tax has been around for years - I believe it was first actually contained in the Finance Act of 1994 (Section 141) and ergo brought in by Ruairi Quinn. You may have heard of him, he is a member of the Labour Party and not exactly known as a 'FF hack'.

But hey, don't let your ignorance of tax law get in the way of an anti-FF rant, even if entirely made up by you...

FillSpectre

I thought the courses to be a farmer took a year at least to get. I also don't know any farmer children who are toffs. Market value for most farm land is agricultural as it would need to be rezoned to be anything else.

It does seem like a bit of the indy media type rant where nothing need be proved but the accusation is good enough.

FillSpectre

FillSpectre wrote:

I thought the courses to be a farmer took a year at least to get. I also don't know any farmer children who are toffs. Market value for most farm land is agricultural as it would need to be rezoned to be anything else.

Absolutely. There are plenty of courses out there that do not qualify the trainee for the tax relief. The Revenue Commissioners have a list of what certificates are acceptable and they are not easy to pick up.

FillSpectre wrote:

It does seem like a bit of the indy media type rant where nothing need be proved but the accusation is good enough.

Absolutely spot on again. It's a nonsense, and the suggestion that it a 'FF hack' thing just goes to show the extent to which people will go to blame FF for everything.

It may rain tomorrow, bet it was planned in a FF tent at the Galway races...

The_Conductor

Along with the cert (commonly known as a "Green Cert") you must also be able to prove that over half your income in the three years prior to transfer was derived from agricultural activities.

There are a few short cuts to getting the Green Cert- such as completion of certain university courses (e.g. the B.Sc.Agr in UCD) but you would still need to satisfy the income rule.

Its by no means the breeze that the OP is suggesting.

Cantab.

Deleted User wrote:

Complete and utter rubbish of the highest order. The concept of relief for people who qualify as farmers on capital acquisitions tax has been around for years - I believe it was first actually contained in the Finance Act of 1994 (Section 141) and ergo brought in by Ruairi Quinn. You may have heard of him, he is a member of the Labour Party and not exactly known as a 'FF hack'.

But hey, don't let your ignorance of tax law get in the way of an anti-FF rant, even if entirely made up by you...

Ok, the way the point was introduced was a bit ranty and I fear I may have deflected from what I was getting at, but this is boards.ie and not questions and answers.

Having said that, I still believe the fact that the landed can avoid inheritence tax whilst middle class people can't is blatantly unfair.

I made reference to a friend of mine who is availing of this scheme. She is quite obviously not a 'farmer' as she was sent off to boarding school from the age of 12 and now works in a bank. She does however get 'paid from the farm' (i.e. an allowance from her dad) despite the fact that she only visits about 6 weekends a year. She was the one bragging to me about doing this teagasc course and fiddling the system so it looks like she's a farmer (far from it I can tell you) and the kind of kids that rock up to take the course.

I don't begrude her her wealth, but it seems that all pigs are equal in this society, but some are more equal than others. The tax system should be biased in favour of the poor and destitude and not the rich who can well afford to contribute to society's modest demands.

I would like to get to the root of this 'agricultural value' of lands law, the reasons why it exists and the beneficaries of this law. Because it certainly isn't the "poor 'aul farmer" who benefits anymore.

FillSpectre

What are you talking about?
Middle class people are entitled to a huge tax free sum for inheritence.

If it bugs you so much report her.

You also know business relief is available for other people too. I think you are angry over nothing other than begrudgery. She comes from a rich family get over it

deedee lepoopoo

Fundamentally, the value of land = what the land is zoned as. Look on the development plan to see what land is zoned as.

Agriculturally zoned land = agricutural land value.

What the market is willing to pay for this the market dictates but note that agricultural land is the least profitable land compared to other commercially zoned lands (residential, retail, office).

Cantab.

FillSpectre wrote:

What are you talking about?
Middle class people are entitled to a huge tax free sum for inheritence.

This is true, but it's based on the real market value and not some made up 'agricultural land' figure. I will probably one day inherit my family's houses, but I will be liable for a huge tax bill based on actual market value and not some other value as given to me by some chap with a clip-board in the dept. of agriculture. Someone classed a farmer will inherit a farmhouse, adjoining buildings and all the land and pay only a token amont of tax because they are classified differently to everyone else by virtue of them being landed. This is my gripe.

FillSpectre wrote:

If it bugs you so much report her.

It doesn't really bug me that much - her financial affairs are her private affairs. And I'm not the kind of person who goes off telling the teacher like a lot of people.

FillSpectre wrote:

You also know business relief is available for other people too. I think you are angry over nothing other than begrudgery. She comes from a rich family get over it

I agree and I have a small ltd. company for these very reasons. Would you please stop name-calling me a 'begrudger', put your branding iron away and engage in a civilised discussion as to why this loophole actually exists. As I keep saying, the beneficaries are far from poor.

Victor

Cantab. wrote:

Having said that, I still believe the fact that the landed can avoid inheritence tax whilst middle class people can't is blatantly unfair.

Family businesses have similar relief. Do the sums and see if it makes sense to roll up those properties into a property management company.

I would like to get to the root of this 'agricultural value' of lands law, the reasons why it exists and the beneficaries of this law. Because it certainly isn't the "poor 'aul farmer" who benefits anymore.

Agricultural value is the value of land zoned agricultural and based on a multiple of the annual profit that land would make for a farmer. It varies, but typicly not more than €50,000 per hectare.

Development value is the value that land would make if it were zoned and developed.

'Hope value' is the difference, but marked down by a discount because of hte risk involved.

A huge portion of farmer's incomes in recent decades has been from (a) selling land (b) selling options on land based on an up front payment and sale at a future date at today's price.

Cantab.

Cantab. wrote:

Ok, the way the point was introduced was a bit ranty

Fair enough.

Cantab. wrote:

I will probably one day inherit my family's houses, but I will be liable for a huge tax bill based on actual market value

Tell your family to leave the houses to me, and I'll stump up the taxes, no no, I insist, you don't have to thank me...;)