There is a special relief where the benefit obtained consists of certain business assets e.g. shares in a family trading company or taking over a business previously carried on by parents in their own names.
This is a very valuable relief and the market value of the benefit received is reduced to 10% of its true value for inheritance and gift tax purposes.
The intention of the relief is to allow for the transfer of businesses within families without incurring major tax liabilities. Needless to say there are numerous rules and regulations for dealing with this relief.
Because of the complexity of these rules and the fact that everybody’s circumstances are different we deal with such matters by way of consultation and an additional charge will arise in respect of same.
A similar relief to the business relief explained above is available in respect of agricultural property. The market value of qualifying agricultural property is reduced to 10% of its true value when calculating inheritance or gift tax liabilities.
Favourite Nephew or Niece Relief
Where an individual leaves a business or farm to a nephew or niece who has worked substantially on a full time basis for a period of five years up to the date of the gift or inheritance in running the business then the relevant class threshold between them will be treated as a parent/child situation. This means the tax-free threshold will increase to €280,000.