Agricultural Relief Ireland: 90% CAT Relief on Farm Gifts & Inheritances (2026)

If a farm is a major part of your family estate, this is not an area to plan from a headline. The relief can make an enormous difference, but the correct result depends on the assets, the beneficiary, the valuation date, farming or leasing arrangements and other taxes that may arise.

This guide explains the Revenue rules in accessible terms. It is not a substitute for advice from an agricultural tax adviser and solicitor on a live farm transfer or succession plan.

What does the 90% relief actually mean?

Revenue describes the agricultural value of qualifying property as 10% of its market value for the relief calculation. In simple terms, property with a market value of €1,000,000 can have an agricultural value of €100,000 before the other CAT calculation rules are applied.

That does not automatically mean the CAT bill is zero. The beneficiary's available CAT threshold, previous gifts or inheritances, deductions and the precise property transferred still matter.

What counts as agricultural property?

Revenue's current guidance includes agricultural land, pasture and woodland situated in the EU or United Kingdom, crops and trees growing on such land, farm buildings and certain dwelling houses, livestock, bloodstock and farm machinery on the property, and qualifying farm-payment entitlements.

The property must qualify as agricultural property both on the date of the gift or inheritance and on the valuation date. Company shares are not agricultural property for this relief, although Business Relief may be relevant in some cases.

The first test: at least 80% agricultural property

To satisfy the asset test, at least 80% of the total value of the beneficiary's property must consist of agricultural property on the valuation date.

The calculation includes the agricultural property being received and the beneficiary's other property. Revenue's guidance contains specific rules about what values and debts are taken into account, so do not do this calculation casually from a rough net-worth figure.

Simple illustration

The second test: active farmer requirements

For gifts and inheritances under the current rules, the beneficiary must also satisfy the active-farmer test. Revenue says the agricultural property must be farmed on a commercial basis for at least six years from the valuation date, either by the beneficiary or by a person to whom the property is leased.

In addition, the person farming the property must either hold an appropriate agricultural qualification or farm the agricultural property for at least 50% of their normal working hours, subject to the detailed Revenue rules.

Do not rely on old articles saying that a lease simply needs to be to “an active farmer” or that a relative cannot be the lessee. Use Revenue's current qualification and working-time tests.

What can trigger a clawback?

Agricultural Relief comes with continuing conditions. Revenue may withdraw relief if the farming conditions are not maintained for the relevant six-year period. Disposal of agricultural property can also create clawback issues.

Revenue provides rules under which reinvestment of disposal proceeds in replacement agricultural property may preserve all or part of the relief. The details matter, including the amount reinvested and the timing, so get advice before selling or changing the use of property that benefited from the relief.

Do you have to file an IT38?

Yes, if you are claiming Agricultural Relief. Revenue specifically requires an IT38 CAT return when the relief is claimed, even if the normal 80%-of-threshold filing test would not otherwise require a return.

Agricultural Relief is only one part of farm succession

A farm transfer can involve more than CAT. Depending on whether the transfer happens during life or on death, and on the facts, other issues can include Capital Gains Tax, Stamp Duty, retirement reliefs, business structures, ownership between family members, leases and the practical future of the farm.

That is why “Who should get the farm in my will?” should usually be answered alongside tax and succession advice, not after the will has already been drafted.

Should you transfer the farm during life or by will?

There is no universal tax answer. A lifetime transfer can have very different consequences from an inheritance on death. Age, the intended successor, existing farming arrangements, asset values and other taxes can all change the comparison.

The correct approach is to model both routes before committing to one.

What about multiple children?

Farm succession often becomes a family question as much as a tax question. Leaving the farm equally to several children may not produce the practical result anyone wants. Leaving it to one child can raise questions about provision for the others.

Those are exactly the circumstances where a bespoke succession plan can be valuable. The tax relief should support the family plan, not dictate it blindly.

Questions to take to your adviser

• Does the intended beneficiary satisfy the 80% asset test on the likely valuation-date facts?
• Who will farm the property and how will the active-farmer test be met?
• What happens if land is leased, sold or its use changes?
• What CAT threshold has the beneficiary already used?
• What CGT or Stamp Duty issues arise under a lifetime transfer?
• How should other children or beneficiaries be provided for?
• Should the farm pass during life, under the will, or through another structure?

Official Revenue references

• Revenue: Agricultural Relief overview
• Revenue: asset and active-farmer tests
• Revenue: clawback rules
• Revenue: claiming Agricultural Relief

Important: This article is general information, not tax or legal advice. Agricultural Relief is condition-based and can be clawed back. Use current Revenue guidance and obtain specialist advice for an actual farm succession or transfer.