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Hi Alan, A farmer client transferred his farm to his son subject to a payment of €1,000 per month payable while the farmer and his wife are alive. This payment is not charged on the property and therefore we have calculated the value of same based on the amount that would be needed to be invested, in the most recent issue of Government Stocks (with a maturity date of at least 10 years) to generate an Income of €12,000 per year. We have therefore deducted this Capitalized Value from the value of the Farm transferred. As the son can claim Agricultural Relief, obviously only 10% of the capitalized value is deducted. However, when the farmer and his wife dies what is the position in relation to the "Cessor of Reserved Rights"? Obviously the son takes an additional benefit from his parents on the death of the last survivor, and as we understand it, the value of this benefit is recalculated at the date of death based on the most recent issue of Government Stocks. Would the son be taxed on the full capitalized value as calculated, or would he be able to avail of Agricultural Relief and only be taxable on 10% of the value as only 10% was deducted from the initial gift?

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Asked on 17 November 2015 10:09 am
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