Tax Toolkit / Gift / Inheritance Tax

The tax relief on interest paid on qualifying home loans is 25% for years 1 and 2; 22.5% for years 3, 4 & 5 and 20% for years 6 and 7. The upper thresholds in respect of the amount of interest paid qualifying for tax relief are €20,000 for individuals who are married, in a civil partnership or widowed and €10,000 for individuals who are unmarried and not in a civil partnership. After year 7, the rates and thresholds for relief are as for non-first time buyers.

CAT relief is available in respect of gifts and inheritances of agricultural property including land, subject to certain conditions. At present, individuals are entitled to the relief based on a definition of 'farmers' that is related to asset values. A change is being introduced to target the relief at active farmers to ensure productive use of agricultural property. From 1 January 2015, and subject to other conditions, the relief will be available only in respect of agricultural property gifted to or inherited by an individual who subsequently uses the property for agricultural purposes for a period of not less than six years or who leases out the agricultural property for not less than six years for agricultural use. To qualify for the relief the beneficiary or lessee must spend not less than 50 per cent of his or her normal working time farming agricultural property (including the agricultural property comprised in the gift or inheritance) on a commercial basis and with a view to the realisation of profits from that agricultural property. The amendment applies in relation to gifts or inheritances taken on or after 1 January 2015.

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