CAT - Agricultural Relief Flashcards
What are the types of property defined as “Agricultural Property”
- Agricultural land and woodland situated in the EU
- Crops/trees growing on the land
- Houses of a character appropriate to the property
- Livestock/bloodstock and farm machinery
- EU single farm payment
What are the 2 criteria needed to qualify as a farmer?
- The “80%” test
* One of the “Three additional tests”
What is the 80% test?
it is the gross value of all that you own after you take the gift or inheritance. The only exception to this rule is when taking in your own principal private residence you may take in the net value after your mortgage.
What are the three additional criteria as well as the 80% test? (of which, at least one must be satisfied)
- They must have an agricultural qualification (e.g. the green cert, Ag science degree) or must obtain that qualification within 4 years of the farm being transferred and must farm the land on a commercial basis, with a view to making a profit, or
- If they do not have the agricultural qualification, they must spend not less than 50% of their normal working time farming., or
- If the person does not fulfil these criteria, they can still qualify for agricultural relief if they lease out the farm that has been transferred to them to a farmer (who fulfils either of the criteria above) for a minimum of six years.
How can Agricultural Relief be clawed back?
Relief will be withdrawn if, in the six years following the inheritance/gift of the farm:
• The beneficiary ceases farming and does not lease out the land to a leasee who farms the land for the remainder of the 6-year period
• The beneficiary disposes of the agricultural property without reinvestment (within one year) in further agricultural property that is farmed by the beneficiary or by a leasee for the remainder of the 6-year period.
What is Section 72 FA 2017?
Section 72 FA 2017 inserts a new section which provides that agricultural relief can apply to a gift or inheritance of agricultural property which is leased and on which solar panels are installed.
The active farmer requirement will be met where a beneficiary leases land for the installation of solar panels provided that not more than half of land comprised in the gift or inheritance is occupied by the solar panels and ancillary equipment and the beneficiary actively farms the land not occupied by solar panels or leases it to a leasee who will meet the “ active farmer “ requirements
When is the farmer test applied?
On the valuation date
