Farm inheritance

Benji20122012

My uncle passed away last week and left the farm and homestead to me—roughly 38 acres in North Galway.

I have no farming experience and will look to lease it out for at least 7 years.

I am one of the executors of the will and so had the first meeting with the solicitors last week.

After Xmas, I will need to speak to a Farm adviser and Farm tax inheritance consultant.

As nobody is living on the farm, I am looking to get security cameras installed.

Would appreciate it if there is any advice that I could use. It's a pretty new situation for me. Thanks in advance.

893bet

big tax bill unless you can qualify for agricultural relief for inheritance from an uncle. There is the thing called a “favourite nephew” also.

Farm tax cosultant is the way to go.

Is there a house that you are putting in camera? Get the house rented (though if he was a bachelor it might not be livable ) and the land leased and forget the camera. Camera only stop an honest man same as a lock.

Benji20122012

Probate has to be completed first I believe before the farm and house can be rented

893bet

I dont think so but rent accrues to the deceased estate rather than to you so may not be worth the hassle of you arranging.

Water John

Primary focus for you is lowering or eliminating any tax bill. So good advice from professionals needed in that area.

If you want a remote camera, that can operate without electricity on a solar panel, check our Reolink.

amacca

I think if you do inherit under AG relief (to reduce CAT) means you wont be able to rent out for 6 years or they will clawback the relief? You need to be classed as an active farmer or young trained famer for any ag relief?

Isn't there something new in or coming in regarding land you just acquired (maybe its just on purchased land)......you cant rent it tax free unless its owned for 7 years or something? ...may not apply to OP though.

Poster above is totally correct though imo, first order of business is reducing any tax liability.

SodiumCooled

https://www.boards.ie/discussion/comment/121520293#Comment_121520293

Agri Relief is a separate thing to the favourite nephew relief.

Favourite nephew relief is to have the inheritance considered under the group A inheritance threshold (i.e. the op be considered a child of his uncle for inheritance purposes and get the much higher inheritance tax threshold)

Agri relief is where the farm value is reduced by 90% and only that 10% is considered for tax purposes.

The op could qualify for neither, one or both. If he wasn’t involved in farming with his uncle then it’s probably unlikely to qualify for the favourite nephew relief but he needs proper advise.

leasing land long term to a suitable farmer can be a means to qualify for the agri relief, though there are many other things that need to be taken into account also.

893bet

https://www.boards.ie/discussion/comment/121521411#Comment_121521411

Yes two seperate options that could work independently or in unison to reduce/eliminate tax liability.

Suggest some reading and googling around around “favourite nephew”, “inheritance thresholds” and “agricultural inheritance tax relief” and then meet the advisor when you have a basic understanding

cal naughton

I was in a similar situation to the op i didn't qualify for ag relief as i had no green cert so if the farm is making a profit for the previous 3 years you might qualify for business relief which will also give a 90 % write down of the value. The thing is you cannot lease it out for six years so you will have to stock it to the minimum and return a profit for the six years to avoid a clawback on the business relief.

The most important thing is a good accountant. I'm also based in North Galway and if you want you can pm me for the name of my lad who was a god send.

SodiumCooled

https://www.boards.ie/discussion/comment/121521799#Comment_121521799

There is an option to lease to a trained farmer and avail of agri relief even without the green cert. But it needs to be looked into and to see if all boxes can be ticked.

893bet

Asset test is the hardest part. Especially for that size farm.

Benji20122012

Thanks for all your comments, I'll take them all on board.

for my own interest, what is the average rent in north Galway per acre ?

massey 265

https://www.boards.ie/discussion/comment/121523248#Comment_121523248

Have outside block on 6 yr lease in north galway.No entitlements ,good land,300 eu per acre.

Water John

Cal above offered help. He's from your area and you should pm him/her.

Benji20122012

Yearly?

Benji20122012

300euro a year / acre? For a small farm that seems incredibly low even just to cover insurance

Mooooo

https://www.boards.ie/discussion/comment/121524489#Comment_121524489

Depending on the land it might be a lot, a profit has to be made by the people farming the ground as well in order to pay it

893bet

https://www.boards.ie/discussion/comment/121524489#Comment_121524489

300 per acre per year? You woukd have more than 11k tax free if done correctly.

Insurance be less than 1k per annum.

Donald Trump

https://www.boards.ie/discussion/comment/121521398#Comment_121521398

It's the opposite. Sometimes - if you don't have the Green Cert or equivalent - you would need to rent out to someone qualified in order to avail of the relief

roosterman71

https://www.boards.ie/discussion/comment/121524489#Comment_121524489

Just out of interest, what did you think it was worth?

Donald Trump

https://www.boards.ie/discussion/comment/121525550#Comment_121525550

Would land in that area make that? Surely some of the madness has subsided after this year?

Jb1989

Sorry for the loss of your uncle by the way.

Neddyusa

https://www.boards.ie/discussion/comment/121526610#Comment_121526610

The majority of North Galway land wouldn't make the colour of 300/ac, all depends where of course.

What part of North Galway OP?

Are there rushes on it? Any dairy farmers in the locality? As others have said, a good tax advisor could be invaluable to you here.

Lime Tree Farm

The poster said there is a dwelling included with the inherited farm, will this make a difference if they are already own a house..

amacca

https://www.boards.ie/discussion/comment/121531305#Comment_121531305

Is the dwelling classed as a farm house and therefore increases the value of ag assets making it easier to satisfy 90%?

Or if you already own a house does it get classed as a non-ag asset?