Each year the budget arrives with a sense of anticipation and worry, as there may be seismic changes, that will impact practice or our clients. As each year passes, however, Budget announcements tend to tinker on the edges of the taxes that apply to solicitors involved in probate and will drafting and this year is no different.

The taxes that solicitors in this area deal with are normally called capital taxes and touch on assets and property. The main points from the Budget are as follows:-

• The upper age for retirement relief has moved from 65 to 70. Background. Retirement relief is available for parent-to-child disposals. Up to now if a parent disposes of a farm or a business, they get full CGT relief, regardless of the value of the farm or business, as long as the parent is between 55 and 65. If the parent is 66 or older, CGT relief is only available for businesses worth under €3 million. Where you are transferring or selling your farm or business to someone who is not a child, you can get CGT relief. You get CGT relief if you are under 66 and the business is less than €750,000. If you are over 66 you get CGT relief if you are selling to someone other than a child and the business is under €500,000. What does the Budget Change Mean? What the change means is that this age threshold of 66 has now been lifted to 70, so you get the benefit of the higher thresholds for longer. So you can hold onto your business a bit longer and still get the benefit of the higher values on your relief.

• Foster children to be treated as class B beneficiaries with respect to gifts/inheritances from their foster parents. Background. Foster children are not the biological children of their parents. They are normally treated as stranger in blood to their foster parents and thus class C. What does the Budget Change Mean? This change gives a greater degree of relief and allows a foster parent to make a Class B gift to a foster child. This is to recognise the closeness in the relationship between a foster parent and a foster child.

• Consanguinity relief to be extended for 5 years. Background. This is a stamp duty relief and reduces the rate of stamp duty from 7.5% to 1% where agricultural land is being sold or transferred by means of voluntary conveyance. It only applies to such disposals where there is a relationship between the transferor and the transferee. For example, father/son, uncle/nephew, brother/sister. There are a range of conditions and restrictions to the relief. Principally that the transferee must farm the land for at least 6 years or lease it to a person who will farm the land for six years. What does the Budget Change Mean? The relief was due to expire on 31 December 2023. It has been extended for 5 years.

• The land leasing income tax relief to be amended so that it becomes available when land has been owned for 7 years. Background. There is income tax relief for farmers when they lease land to persons with whom they have no connection. The lessee must use the land for the purpose of carrying on a farming trade. If the lease is at least 5 years but not greater than 7 years, then profit on the leases of €18,000 will not be taxable. There are other bands of income, say for leases from 7 to 10 years, or 10 to 15 years. What does the Budget Change Mean? At the moment, it doesn’t matter how long you have owned the land before you lease it. It now appears that you must own the land for at least 7 years before you can obtain the benefit of the relief. The rationale here appears that they do not want “fly by night” farmers getting the benefit of the income tax relief. The farmers letting out the land must be genuine.

Hope this helps and I will have further reflections on the budget changes over the coming weeks. Remember if you have any probate, tax or will drafting queries, please do not hesitate to reach out to me through the query service on the site or at ckelly@hcalaw.ie