The Irish National Recovery plan includes warnings that taxes could be increased.
For instance, upto April 2009 a parent could transfer €542,544 worth of property to a child, but from 8th December 2010 this has been reduced to €332,084.
Capital Gains Tax and Capital Acquisitions Tax rates have also been increased from 20% to 25%.
Business Relief/Agricultural Relief:
At present the value of a Business or Farm can be reduced by 90% so that the person receiving the transfer is only assessed on 10% of the value. The Irish Commission on taxation has proposed reducing the relief rate down to 75% or even lower.
There is also a proposal to limit agricultural relief to farms with a value of €3,000,000 so anyone with a holding worth more than that could suffer an unexpected tax charge if these rates are reduced as proposed in 2012.
Stamp Duty:
The current exemption from stamp duty for a young trained farmers under 35 officially expires on the 31st December 2012. The Commission on Taxation has recommended retention on continuation of this particular relief.
Security for the Owner/Tranferor:
It is essential that the owner/transferor considers in good time what security he/she will have after making the transfer. This could involve retaining some land and a dwellinghouse if practical or perhaps transferring only half and leasing the other half of the farm. Available pensions must also be assessed. The transferors must also be fully aware of the potential effect of death, divorce or separation concerning the transferee. Careful discussion is needed and you should involve your legal advisor and financial advisor in those discussions.