Finance Act, 1994

Amendment of section 19 (value of agricultural property) of Principal Act.

141.—(1) Section 19 of the Principal Act is hereby amended—

(a) by the substitution of the following definition for the definition of “agricultural property”:

“‘agricultural property’ means agricultural land, pasture and woodland situate in the State and crops, trees and underwood growing on such land and also includes such farm buildings, farm houses and mansion houses (together with the lands occupied therewith) as are of a character appropriate to the property, and farm machinery, livestock and bloodstock thereon;”,

(b) by the substitution of the following definition for the definition of “agricultural value”:

“‘agricultural value’ means—

(a) in the case of farm machinery, livestock and bloodstock, 75 per cent. of the market value of such property,

(b) in the case of a gift of agricultural property, other than farm machinery, livestock and bloodstock, 70 per cent. of the market value of the agricultural property comprised in the gift reduced by 50 per cent. of that market value or by a sum of £150,000, whichever is the lesser, and

(c) in the case of an inheritance of agricultural property, other than farm machinery, livestock and bloodstock, 70 per cent. of the market value of the agricultural property comprised in the inheritance reduced by 35 per cent. of that market value or by a sum of £105,000, whichever is the lesser;”,

(c) by the substitution of the following subsection for subsection (4):

“(4) In relation to the deduction, in respect of agricultural property, of—

(a) in the case of a gift, 50 per cent. of its market value, or £150,000, whichever is the lesser, and

(b) in the case of an inheritance, 35 per cent. of its market value, or £105,000, whichever is the lesser,

the amount deductible shall not exceed £150,000 in the case of a gift and £105,000 in the case of an inheritance, in respect of the aggregate of—

(i) all taxable gifts taken on or after the 28th day of February, 1969, and

(ii) all taxable inheritances taken on or after the 1st day of April, 1975, which consist in whole or in part of agricultural property, taken by the same person, as donee or successor, from the same disponer.”,

(d) by the substitution of the following definition for the definition of “farmer”:

“‘farmer’, in relation to a donee or successor, means an individual who is domiciled and ordinarily resident in the State and in respect of whom not less than 80 per cent. of the market value of the property to which the individual is beneficially entitled in possession is represented by the market value of property in the State which consists of agricultural property, and, for the purposes of this definition, no deduction shall be made from the market value of property for any debts or incumbrances.”,

and

(e) in subsection (5), by the substitution of the following paragraph for paragraph (a):

“(a) The agricultural value shall cease to be applicable to agricultural property, other than crops, trees or underwood, if and to the extent that such property, or any agricultural property which directly or indirectly replaces such property—

(i) is sold or compulsorily acquired within the period of six years after the date of the gift or the date of the inheritance; and

(ii) is not replaced, within a year of the sale or compulsory acquisition, by other agricultural property,

and tax shall be chargeable in respect of the gift or inheritance as if the property were not agricultural property:

Provided that this paragraph shall not have effect where the donee or successor dies before the property is sold or compulsorily acquired.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 11th day of April, 1994.