Chapter Three Flashcards
- What are the two (2) income Tax rates/bands?
- Farm buildings and land improvements can be written off under Capital Allowances over a period of how many years?
- What is the rate of tax for limited companies?
12.5%
- What is the % stock relief for young trained farmers and how long?
100% for 4 years
- What are two (2) advantages of income averaging for a farmer?
- Who pays Capital Gains Tax?
- What are the conditions of retirement relief?
- Who pays Capital Acquisitions Tax?
- What are the criteria to qualify as favourite niece/nephew?
Definition of farmer for agricultural relief?
- What are the Stamp Duty Rates?
What rate of stamp duty (%) is applicable to land purchased by farmer over the age of 35?
7.5%
What is the rate of Capital Gain Tax?
33%
What is the rate of Capital Acquisitions Tax?
33%
Name two (2) advantages of a registered farm partnership?
What is the tax credit for a succession farm partnership?
€5000
What is the difference between inheritance and succession transfers?
In a succession farm partnership what % of the assets must be transferred before the agreed time?
80%
Name one (1) way a farmer can qualify for the active farmer test?
Name one (1) condition to qualify for the young trained farmer stamp duty relief?
State four (4) forms of taxation.
Where a young farmer enters into a company with their parents, what is
the minimum percentage that young farmer must be a share holder in the
company?
20%
What is the maximum time frame (years) that a farmer is entitled to
participate in the Young Farmers Scheme?
5 years
State a benefit of setting up a limited company?
Briefly describe the term ‘stock relief’
. What do the following acronyms stand for?
USC: ____________________________________________
CGT
a) What is Captial Acquisitions Tax? (0.5 marks)
It is a tax on gifts and inheritances.
b) What is the difference between Inheritance and Gift Tax
c) Outline the three (3) group thresholds of Captial Acquistation Tax (CAT). List an example of each threshold, and state the tax free threshold amount. (1.5 marks)
1.
Group Thresholds
2.
Example of who can avail of this threshold ‘
3.Tax Free Threshold amount
Group A
The Group A threshold applies to gifts or inheritances a child gets from their parent. ‘Child’ includes the adult child of a parent. It also includes:
A stepchild
An adopted child who gets a gift or inheritance from their adopted parent or birth parent
Group A applies if you are the child of:
The person who gives you the benefit
Their civil partner
It can also apply if you are a foster child.
If you die and you or your civil partner have a child under the age of 18, the child can get a benefit under Group A from:
Your parent
Your parent’s civil partner
Inheritance to a parent from their child
When you get an inheritance from your child:
Group A threshold: €400,000
Group A applies if you get full ownership of the inheritance.
Group B applies if you get a limited interest.
If you get a gift from your child, Group B applies.
You may be exempt from CAT on an inheritance from your child if, in the previous 5 years, your child took a gift or inheritance from either parent and it was not exempt from CAT. It does not have to be the same property or of the same value. In this case, no tax needs to be paid even if the inheritance from the child is over the threshold.
Group B
Group B applies if you get a gift or inheritance from someone and you are their:
Parent and you get a gift or a limited interest. Group A may apply if you get an inheritance.
Brother or sister (sibling).
Sibling’s child (or you are the child of their sibling’s civil partner). Favourite nephew or Niece Relief may apply.
Grandparent or great-grandparent.
Grandchild or great-grandchild.
If a grandchild is under 18 years of age and takes a gift or inheritance from their grandparent, Group A may apply if the grandchild’s parent is deceased.
Group B threshold: €40,000
Group C
Group C applies to any relationship not included in Group A or Group B.
Relations of a deceased spouse
If you get a gift or inheritance from a relation of your deceased spouse or civil partner, you will be assessed with the same group as your spouse or civil partner would have been if they got the benefit from their relation.
For example, if you get a benefit from the father of your spouse or civil partner, the group threshold would be Group C. But if you get a benefit from the father of your spouse or civil partner and your spouse or civil partner is deceased, then the group threshold that applies to you would be the same as for a child who gets a benefit from a parent, Group A.
Group C: €20,000
d) Does the following farmer qualify for agricultural relief? (Show calculations and reason for your answer). (2 marks)
Land €850,000
House in Galway €250,000
Livestock € 85,000
Farm Machinery € 90,000
Farm Buildings €200,000
BPS € 55,000
Cash and other Investments € 58,000
Describe in detail, the qualifying conditions of Agricultural Relief in regards to Capital Acquisitions Tax?
