goverment duties on land

irish_bob

i inherrited a small bit of land from one of my parents back in 2006 , im not the farmer of the house so i only got 10 acres which is fine , my problem is , im told that unless i keep this land for 5 years , i will have to pay inherritance tax on it , im also told that i would have to pay back stamp duty on the land were i to sell it inside 5 years , can anyone confirm or deny this

Fighting Irish

I wouldn't have a clue but does anyone know why if you keep land for 5years you don't have to pay inheritance, but you do if you are left a house?

The_Conductor

Bob- it depends on a number of factors (and by rights you probably should seek professional advice on this one).

First of all- you will definitely have to pay Capital Gains Tax on disposal of the land this leaflet from the Revenue Commissioners should explain it in detail.

Depending on whether you are a "farmer" (i.e. whether hold a green cert or equivalent) will determine whether the land qualifies for "agricultural valuation" (as opposed to the open market price). An agricultural valuation of the land is a 90% reduction on its Open Market Selling Price- and is calculated this way towards minimising your potential inheritance tax bill. When you inherit the property- there is a valuation date- on which a nominal value is placed on the property (reduced by up to 90% if you qualify for a farmer designation). You can inherit up to €521,208 (in 2008- lower in previous years) before paying inheritance tax @ 20% on the balance (with the exception of certain "gifts" you may have gotten from the benefactor, over a certain timeframe, prior to their death).

I have no idea what the 10 acres you have is valued at- and to be perfectly honest, if it came under the then threshold at valuation date, don't see that it would be inheritance tax due on disposal of the property- but Capital Gains Tax instead?

You really should seek professional advice on this one.

irish_bob

smccarrick wrote: »

Bob- it depends on a number of factors (and by rights you probably should seek professional advice on this one).

First of all- you will definitely have to pay Capital Gains Tax on disposal of the land this leaflet from the Revenue Commissioners should explain it in detail.

Depending on whether you are a "farmer" (i.e. whether hold a green cert or equivalent) will determine whether the land qualifies for "agricultural valuation" (as opposed to the open market price). An agricultural valuation of the land is a 90% reduction on its Open Market Selling Price- and is calculated this way towards minimising your potential inheritance tax bill. When you inherit the property- there is a valuation date- on which a nominal value is placed on the property (reduced by up to 90% if you qualify for a farmer designation). You can inherit up to €521,208 (in 2008- lower in previous years) before paying inheritance tax @ 20% on the balance (with the exception of certain "gifts" you may have gotten from the benefactor, over a certain timeframe, prior to their death).

I have no idea what the 10 acres you have is valued at- and to be perfectly honest, if it came under the then threshold at valuation date, don't see that it would be inheritance tax due on disposal of the property- but Capital Gains Tax instead?

You really should seek professional advice on this one.

cheers