What 'active farmer' means for land transfer tax breaks
The previous article in this series on the taxation aspects of transferring a farm dealt with the very valuable concession that is Agricultural Relief and the requirements for qualification.
In addition to the requirement that a person's agricultural property must comprise 80pc of the person's total property at the valuation date, the Finance Act of 2014, introduced an 'active farmer' requirement which must also be satisfied in relation to gifts and inheritances taken on or after January 1, 2015 .
You can qualify as an active farmer in three ways:
Farm the land as an active farmer for a minimum period of six years, You do not have to have a farm training qualification but you must farm for 50pc or more of your normal working time. If during the six-year period you decide to lease the land, relief will not be withdrawn, provided the lease/lessee satisfies the requirements for the relief for the remainder of the six-year period.
Be a qualified farmer, ie, hold a Green Cert or equivalent (or acquire one within four years of the gift or inheritance date) and farm the land for a minimum period of six years, In this instance you are not required to farm the land for 50pc or more of your normal working time.
Lease the land to an active farmer (as above) or to a qualified farmer (as above). The lease must be for a minimum period of six years and there can be a number of lessees if necessary provided each lessee satisfies the requirements.
A lease can be to a company but the main shareholder must be a working director and must farm the agricultural property on behalf of the company.
Where land is leased to a company that is owned equally by a person and his or her spouse or civil partner, at least one of them must satisfy the working director and farming requirements to qualify for the relief.