Agricultural Relief: plain-English guide for Irish probate

What it means, in plain English

Agricultural Relief reduces the taxable value of qualifying farmland, farm buildings, livestock, machinery, and bloodstock by 90 per cent for CAT purposes. On a 1,000,000 euro farm passing to a qualifying son or daughter, the relief cuts the taxable value from 1,000,000 euro to 100,000 euro. Combined with the Group A threshold, this often reduces the CAT bill on a family farm to zero.

Agricultural Relief in Irish probate practice

The relief is generous but the conditions are strict. To qualify, the beneficiary must satisfy the 80 per cent test: immediately after the gift or inheritance, at least 80 per cent of the beneficiary's total market-value assets (including their home, cash, investments, and the inherited farm itself) must be agricultural property. This stops someone inheriting farmland purely to shelter a larger non-farming estate. In addition, for inheritances where the valuation date falls on or after 1 January 2025, the disponer must also have been an active farmer or have leased the land to an active farmer for 6 of the 10 years before death. This disponer test, introduced by Finance Act 2024, closed the avoidance route where non-farmers accumulated land for the relief alone. The beneficiary must also be either an active farmer themselves, hold a Green Cert or equivalent qualification, or lease the land to a qualifying active farmer for at least 6 years after the inheritance.

Worked example

Declan, 34, inherits the 80-acre dairy farm he has been working with his father for 12 years, valued at 1,400,000 euro. His own home is worth 280,000 euro and he has 40,000 euro in savings, so his total assets including the farm are 1,720,000 euro. Agricultural assets (the 1,400,000 euro farm) are 81.4 per cent of that, passing the 80 per cent test. His father was the owner-operator up to death, satisfying the active-farmer disponer test. Declan holds a Green Cert and will continue farming. Agricultural Relief reduces the taxable farm value to 140,000 euro. Added to his Group A threshold, the CAT due is zero.

The statutory position

Sections 89 to 102 of the Capital Acquisitions Tax Consolidation Act 2003 set out Agricultural Relief. The 2025 disponer active-farmer requirement was added by Finance Act 2024 Section 76. A clawback under Section 89 applies where the beneficiary disposes of the property within 6 years and does not reinvest the proceeds in replacement agricultural assets within 1 year.

Related terms in this glossary

• CAT (Capital Acquisitions Tax): The Irish tax on gifts and inheritances, charged at 33% on the value of a beneficiary's inheritance above their applicable group threshold.
• Business Relief: A 90 per cent reduction in the taxable value of qualifying business assets for CAT, available where the business has been owned for a minimum period and the beneficiary continues to use it for business purposes.
• IT38 return: The Revenue return a beneficiary files when their gift or inheritance takes them above 80% of the applicable CAT group threshold.
• Dwelling House Exemption: A CAT exemption that can remove inheritance tax on the family home when the beneficiary meets five strict conditions set out in Section 86 of the CATCA 2003.

Related reading

• Agricultural Relief explained
• Agricultural Relief in practice
• CAT thresholds and rates 2026