Chapter Three

Question 1

1. What are the two (2) income Tax rates/bands?

Answer 1

Question 2

2. Farm buildings and land improvements can be written off under Capital Allowances over a period of how many years?

Answer 2

Question 3

3. What is the rate of tax for limited companies?

Answer 3

12.5%

Question 4

4. What is the % stock relief for young trained farmers and how long?

Answer 4

100% for 4 years

Question 5

5. What are two (2) advantages of income averaging for a farmer?

Answer 5

Question 6

6. Who pays Capital Gains Tax?

Answer 6

Question 7

7. What are the conditions of retirement relief?

Answer 7

Question 8

8. Who pays Capital Acquisitions Tax?

Answer 8

Question 9

9. What are the criteria to qualify as favourite niece/nephew?

Answer 9

Question 10

Definition of farmer for agricultural relief?

Answer 10

Question 11

11. What are the Stamp Duty Rates?

Answer 11

Question 12

What rate of stamp duty (%) is applicable to land purchased by farmer over the age of 35?

Answer 12

7.5%

Question 13

What is the rate of Capital Gain Tax?

Answer 13

33%

Question 14

What is the rate of Capital Acquisitions Tax?

Answer 14

33%

Question 15

Name two (2) advantages of a registered farm partnership?

Answer 15

Question 16

What is the tax credit for a succession farm partnership?

Answer 16

€5000

Question 17

What is the difference between inheritance and succession transfers?

Answer 17

Question 18

In a succession farm partnership what % of the assets must be transferred before the agreed time?

Answer 18

80%

Question 19

Name one (1) way a farmer can qualify for the active farmer test?

Answer 19

Question 20

Name one (1) condition to qualify for the young trained farmer stamp duty relief?

Answer 20

Question 21

State four (4) forms of taxation.

Answer 21

Question 22

Where a young farmer enters into a company with their parents, what is
the minimum percentage that young farmer must be a share holder in the
company?

Answer 22

20%

Question 23

What is the maximum time frame (years) that a farmer is entitled to
participate in the Young Farmers Scheme?

Answer 23

5 years

Question 24

State a benefit of setting up a limited company?

Answer 24

Question 25

Briefly describe the term ‘stock relief’

Answer 25

Question 26

. What do the following acronyms stand for? USC: ____________________________________________ CGT

Answer 26

Question 27

a) What is Captial Acquisitions Tax? (0.5 marks)

Answer 27

It is a tax on gifts and inheritances.

Question 28

b) What is the difference between Inheritance and Gift Tax

Answer 28

Question 29

c) Outline the three (3) group thresholds of Captial Acquistation Tax (CAT). List an example of each threshold, and state the tax free threshold amount. (1.5 marks) 1. Group Thresholds 2. Example of who can avail of this threshold ‘ 3.Tax Free Threshold amount

Answer 29

Group A The Group A threshold applies to gifts or inheritances a child gets from their parent. ‘Child’ includes the adult child of a parent. It also includes: A stepchild An adopted child who gets a gift or inheritance from their adopted parent or birth parent Group A applies if you are the child of: The person who gives you the benefit Their civil partner It can also apply if you are a foster child. If you die and you or your civil partner have a child under the age of 18, the child can get a benefit under Group A from: Your parent Your parent's civil partner Inheritance to a parent from their child When you get an inheritance from your child: Group A threshold: €400,000 Group A applies if you get full ownership of the inheritance. Group B applies if you get a limited interest. If you get a gift from your child, Group B applies. You may be exempt from CAT on an inheritance from your child if, in the previous 5 years, your child took a gift or inheritance from either parent and it was not exempt from CAT. It does not have to be the same property or of the same value. In this case, no tax needs to be paid even if the inheritance from the child is over the threshold. Group B Group B applies if you get a gift or inheritance from someone and you are their: Parent and you get a gift or a limited interest. Group A may apply if you get an inheritance. Brother or sister (sibling). Sibling’s child (or you are the child of their sibling’s civil partner). Favourite nephew or Niece Relief may apply. Grandparent or great-grandparent. Grandchild or great-grandchild. If a grandchild is under 18 years of age and takes a gift or inheritance from their grandparent, Group A may apply if the grandchild's parent is deceased. Group B threshold: €40,000 Group C Group C applies to any relationship not included in Group A or Group B. Relations of a deceased spouse If you get a gift or inheritance from a relation of your deceased spouse or civil partner, you will be assessed with the same group as your spouse or civil partner would have been if they got the benefit from their relation. For example, if you get a benefit from the father of your spouse or civil partner, the group threshold would be Group C. But if you get a benefit from the father of your spouse or civil partner and your spouse or civil partner is deceased, then the group threshold that applies to you would be the same as for a child who gets a benefit from a parent, Group A. Group C: €20,000

Question 30

d) Does the following farmer qualify for agricultural relief? (Show calculations and reason for your answer). (2 marks) Land €850,000 House in Galway €250,000 Livestock € 85,000 Farm Machinery € 90,000 Farm Buildings €200,000 BPS € 55,000 Cash and other Investments € 58,000

Question 31

Describe in detail, the qualifying conditions of Agricultural Relief in regards to Capital Acquisitions Tax?

Answer 31