Gift now or inheritance later?
Inheritance tax works the same way whether the farm is given now or left in a will. The difference is that a gift is also a sale in the eyes of the tax system, so capital gains tax and stamp duty come into it. For most farm families the reliefs cover those too, but only if the conditions are met.
In short
- The inheritance tax (CAT) thresholds, the 33% rate and agricultural relief are the same for a gift and an inheritance.
- On a gift, the parent may owe capital gains tax. Retirement relief usually covers it for a farmer aged 55 or over.
- On a gift of land, stamp duty is 7.5%, or 1% with consanguinity relief, or nothing for a young trained farmer.
- An inheritance has no capital gains tax and no stamp duty.
How the two compare
| Gift now | Inheritance later | |
|---|---|---|
| Inheritance tax (CAT) | Same thresholds and rate, with agricultural relief | Same thresholds and rate, with agricultural relief |
| Capital gains tax | The parent may owe it on the gain. Retirement relief often removes it. | None. You take over the land at its value on the date of death. |
| Stamp duty | 7.5% on farmland, 1% with consanguinity relief, or nothing for a young trained farmer | None |
| Valuation date | The date of the gift | Usually the date the grant of probate issues |
| Timing | You choose it, and the 6-year relief rules start now | Depends on the will and on when probate comes through |
Capital gains tax on a gift
When a parent gives away land, it's treated as if they sold it at market value. If it's worth more than when they got it, there's a gain, and capital gains tax is normally 31% on disposals from 7 October 2026 (33% for development land).
Retirement relief takes that tax away for most farmers passing land to a son or daughter. The parent must generally be 55 or over and have owned and farmed the land for at least 10 years. For transfers from 1 January 2025, the relief covers up to €10 million if they're 55 to 69, and up to €3 million if they're 70 or over.
The relief is clawed back if the son or daughter sells the land within 6 years.
Stamp duty on a gift
Stamp duty on a transfer of farmland is normally 7.5%. Two reliefs cut it:
- Consanguinity relief brings it to 1% for a gift or sale between close relatives, such as parent and child. The person receiving must farm the land, or lease it to someone who farms it, for 6 years, and hold an agricultural qualification or farm at least half their working time. The deed must be signed by 31 December 2029.
- Young trained farmer relief removes it altogether if you're under 35, hold an approved agricultural qualification, have a business plan submitted to Teagasc, and will farm the land for at least half your working time for 5 years. It has a lifetime limit of €100,000 of relief, and the deed must be signed by 31 December 2029.
There's no stamp duty on land you inherit under a will.
A worked example
Mary is 62 and has farmed her land for 30 years. She gives the farm, worth €1,200,000, to her son Tomás, who is 30 and has a Green Cert. He passes the 80% farmer test and will keep farming.
| Inheritance tax | 10% of €1,200,000 = €120,000, under the €420,000 threshold: €0 |
|---|---|
| Capital gains tax | Covered by Mary's retirement relief: €0 |
| Stamp duty | Young trained farmer relief: €0. Without it, €90,000 at 7.5%, or €12,000 with consanguinity relief. |
Left to Tomás in Mary's will, the same farm would also come to €0, with no capital gains tax or stamp duty to think about. For this family the choice comes down to timing and control, not tax.
Things that aren't tax
- Control. Once the farm is given, it belongs to the son or daughter. Parents often keep a right of residence or an income, which the solicitor writes into the transfer.
- Nursing home care. The Fair Deal scheme looks at assets given away in the 5 years before someone applies.
- Getting the conditions right. Each relief has its own age, qualification and 5- or 6-year rules. Missing one can cost more than any of the others save.
Common questions
Is it cheaper to gift a farm or leave it in a will?
The inheritance tax is the same either way, because the thresholds, the 33% rate and agricultural relief all apply to both. A gift can also bring capital gains tax for the parent and stamp duty for the child, though retirement relief and the stamp duty reliefs often cover them.
Does a parent pay tax when they gift the farm?
Possibly capital gains tax on the rise in value since they got the land. Retirement relief usually removes it for a farmer aged 55 or over who has owned and farmed the land for 10 years, up to €10 million between 55 and 69, or €3 million from age 70.
Is there stamp duty on an inherited farm?
No. Stamp duty applies to a gift or sale of land, not to land you inherit under a will.
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