Capital Acquisitions Tax on family farm

[leesider]

My father will be 90 next year and his farm (50 acres) is still in his name. If he doesn't transfer ownership of it to me or my sister before he dies and just leaves it to us in his will, we will have to pay Capital Acquisitions Tax on it, correct?
But if he hands it over to us before he dies, no CAT is payable? I am not asking this out of greed; when my dear father passes no amount of money will soften the blow, I'll be gutted, my sister less so I'd say but that's a different matter. I am asking out of curiosity.

 

[Protocol]

CAT applies on gifts and bequests.

How much CAT you might pay, if any, depends on the value of the assets, and whether your CAT allowances have already been used up.

Have you studied Agricultural Relief from CAT?

 

[Clamball]

There are specific Agriculture reliefs to CAT. But be aware if your father needs fair deal in a nursing home then any assets he transferred to others in the previous 5 years would be considered in the calculations.

 

[MHoran379]

There is very little difference in CAT ( capital acquisitions tax) between a farm gifted while alive or inherited on death. The only difference is the small gift exemption which is so small in this context as to be negligible.

There are two other taxes that do apply on a gift however, capital gains tax and stamp duty, which do not apply on an inheritance. Although certain exemptions can apply and you can, sometimes, make yourself qualify for those exemptions.

More than anything else, planning is key to making sure as little tax as possible is paid legitimately. Ideally your father would talk to a tax adviser and discuss the options.

As above other issues come into it- the possibility of nursing home care being needed, his retaining rights for himself, whether a lifetime transfer is better or a will. Discussing it now with advice can save a great deal of tax.

 

[leesider]

There is very little difference in CAT ( capital acquisitions tax) between a farm gifted while alive or inherited on death. The only difference is the small gift exemption which is so small in this context as to be negligible.

There are two other taxes that do apply on a gift however, capital gains tax and stamp duty, which do not apply on an inheritance. Although certain exemptions can apply and you can, sometimes, make yourself qualify for those exemptions.

More than anything else, planning is key to making sure as little tax as possible is paid legitimately. Ideally your father would talk to a tax adviser and discuss the options.

As above other issues come into it- the possibility of nursing home care being needed, his retaining rights for himself, whether a lifetime transfer is better or a will. Discussing it now with advice can save a great deal of tax.

Thanks to yourself and the others for the replies. It doesn't look at the moment as if there is any chance of my father going into a nursing home thankfully. That could change of course. It seems there is no financial advantage in transferring the land to me and my sister before his death.
It's not a subject I really want to discuss with him anyway. Even thinking about it gets me down to be honest