Passing on the family farm in Ireland: the tax, the reliefs and the traps

Without reliefs the gift’s CAT in the first case is nil only because the parent’s CGT on the same gift is credited against it (section 104 of the CAT Act): you don’t pay both taxes on the same property.

The traps

• The child must farm it. Agricultural relief, consanguinity relief and young trained farmer relief all depend on the land being actively farmed: by the child with a qualification or at least half their working time, or (for agricultural and consanguinity relief) by a farmer who leases it. A child with an off-farm career who neither farms nor leases loses all three.
• The 80% asset test. A child who already owns a house and savings may fall under 80%. A mortgage on their own home can be deducted, but other debts cannot.
• Selling within 6 years. The reliefs are clawed back if the land is sold and the money is not reinvested in farmland within a year, and the parent’s CGT relief is charged to the child.
• Age 70. Retirement relief on a transfer to a child drops from €10 million to €3 million of value, with no deferral of the tax above it.
• Deadlines on the reliefs. Consanguinity relief ends for deeds after 31 December 2028 and young trained farmer relief after 31 December 2029, unless extended.
• Paperwork. An IT38 CAT return is compulsory whenever agricultural relief is claimed, even when no tax is due, and retirement relief must be claimed on the parent’s return for the year of the transfer.

Work out your own

• Farm transfer tax calculator: CAT, CGT and stamp duty with and without each relief, and what to keep for how long.
• Inheritance tax calculator: any gift or inheritance, earlier gifts and your deadline.
• Small gift exemption planner: €3,000 a year from each giver, outside the threshold.
• Fair Deal calculator: the 3-year cap on farm assets for a nursing home.

Frequently asked questions

How much tax is due when a farm passes to a son or daughter in Ireland?
Often none, if the reliefs apply. In our example a €1.5 million farm given by a parent aged 64 to a qualified daughter of 30 who will farm it costs €0 in tax, against €496,000 without reliefs. If she will not farm it, the bill is €448,410, mostly gift tax (CAT), because agricultural relief requires the beneficiary to farm the land or lease it to a farmer for 6 years.

What is the farmer test for agricultural relief?
Two tests. On the valuation date at least 80% of the beneficiary’s gross assets, including the farm, must be agricultural property. And for 6 years they must farm it themselves, either with a recognised farming qualification or spending at least half their normal working time farming (Revenue takes that as about 20 hours a week), or lease it to someone who does. A part-time farmer with an off-farm job can qualify on the 50% route.

Is it better to give the farm now or leave it in a will?
An inheritance carries no capital gains tax and normally no stamp duty, so on the numbers alone inheriting can cost less: €0 with agricultural relief in our example, €356,400 without. A lifetime gift adds CGT and stamp duty, but retirement relief and the young trained farmer and consanguinity reliefs usually remove them, and a gift lets the successor build the business and claim the Succession Farm Partnership credit sooner. Fair Deal, the pension and the parents’ housing all matter as much as the tax.

Why does age 70 matter for passing on a farm?
Retirement relief on a transfer to a child is capped at €10 million of value for a parent aged 55 to 69, but only €3 million from 70. In our example a €4 million farm (bought for €500,000) given at 69 has €0 of CGT; given at 72, €310,000, and the tax above the cap cannot be deferred.

What happens if the child sells the land later?
Within 6 years: agricultural relief is clawed back unless the proceeds go into other farmland within a year, the parent’s CGT retirement relief is charged to the child, and consanguinity stamp duty relief is withdrawn. Within 5 years: young trained farmer relief is clawed back unless the land is replaced within 12 months. Development land has a 10-year clawback that reinvesting cannot avoid.

Did Budget 2027 change farm transfer tax?
The Group A CAT threshold rose to €420,000 and CGT fell from 33% to 31% for transfers from 7 October 2026, and the Succession Farm Partnership credit doubles to €10,000 a year for partnerships registered from 1 January 2027. Agricultural relief, retirement relief and the stamp duty reliefs were unchanged. The changes are in the Finance (No. 2) Bill 2026, which is due to become law in December.

Sources

• Revenue CAT Manual Part 10: agricultural relief (the 80% test, the active farmer test, clawback), business relief and the section 104 credit
• Revenue TDM 19-06-03b: retirement relief on a transfer to a child (the €10 million and €3 million limits, deferral, clawback)
• Revenue: young trained farmer relief and consanguinity relief (Stamp Duty Manual Schedule 1)
• Revenue: CAT thresholds and the Finance (No. 2) Bill 2026 (€420,000 threshold, 31% CGT, Succession Farm Partnership credit)

General information, not tax or legal advice. Every farm transfer should be planned with an accountant and solicitor. Read 12 November 2026.