Tax Appeals Commission determination 40TACD2022 regarding CAT, 2022

• Administrative Decision Number: 40TACD2022
• Date: 25 February 2022
• Subject Matter: CAT
• Appellant: REVENUE COMMISSIONERS
• Respondent: Appellant

40TACD2022

[REDACTED]

Appellant

V

REVENUE COMMISSIONERS

Respondent

DETERMINATION

Introduction

1. The Appellant received gifts of agricultural property and non-agricultural property

comprising residential property from her parents on the same day in October 2013 and

claimed agricultural relief in accordance with Capital Acquisitions Tax Consolidation Act

2003 (CATCA), section 89. The Appellant argued that she received the agricultural

property before she received the residential property and therefore after receiving the

agricultural property she was a “farmer” and therefore entitled to reduce the market

value of the agricultural property by 90% for the purposes of establishing a liability to

capital acquisitions tax.

2. The Respondent refused the agricultural relief on the grounds that there was no

evidence to support the Appellant’s assertion that she received several benefits of

agricultural property in priority to the residential property. The Respondent also

asserted that where there is more than one gift on the Valuation Date, all gifts must be

looked at collectively as if all benefits had been received contemporaneously and not

in isolation.

3. Therefore in this appeal it is necessary to establish whether Appellant received the gift

of agricultural property from her parents before receiving non-agricultural property

and thereafter to determine whether all benefits received on the Valuation Date must

be considered collectively at the end of the day or in isolation at a particular point in

time.

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Background

4. During October 2013, the Appellant received the following gifts from her parents:

(a) One quarter share of agricultural land at [*****] with a market value of €80,000;

(b) Agricultural land at [*****] valued at €200,000. A deduction of €100,000 was

made in respect of the transfer of a residential property transfer by the Appellant

to her father on 8 October 2013. The value of this gift of the Agricultural land

was therefore €100,000.

(c) Residential property at [*******] valued at €[******]0,000, with an exclusive

right of residence for her parents;

5. By reason of the gifts being made in October 2013, the Appellant failed to file a gift tax

return which was due by 31 October 2014. Following intervention from the

Respondent, the Appellant filed a gift tax return on 27 October 2015 claiming

agricultural relief.

6. The Respondent refused agricultural relief on the grounds that the provisions of

CATCA, section 89 were not satisfied throughout the entirety of the Valuation Date and

where there is more than one gift on the Valuation Date, all gifts must be looked at

collectively as if all benefits had been received contemporaneously and not in isolation.

7. By notice of assessment dated [******] July 20[******], the Appellant was assessed to

capital acquisitions tax in the amount of €30,921 plus surcharge.

8. By notice of appeal dated 14 August 20[******], the Appellant appealed the

assessment raised. The Appellant contended that she is entitled to agricultural relief

as she was a farmer within the meaning of the CATCA, section 89 on the valuation date

and after taking the gifts of the agricultural property, and this was not affected by the

receipt of a separate gift or non-agricultural property later on the same day.

Legislation

9. CATCA, section 89(1) establishes definitions of “ agricultural property “ , “agricultural

value” and “farmer “:

“agricultural property “ means –

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(a) agricultural land, pasture and woodland situate in a Member State and

crops, trees and underwood growing on such land and also includes such

farm buildings, farm houses and mansion houses ( together with the lands

occupied with such farm buildings, farm houses and mansion houses ) as are

of a character appropriate to the property, and farm machinery, livestock

and bloodstock on such property …”

“agricultural value “ means the market value of agricultural property reduced by 90

per cent of that value”

“farmer” in relation to a donee or successor, means an individual in respect of whom

not less than 80 per cent of the market value of the property to which the individual

is beneficially entitled in possession is represented by the market value of property in

a Member State which consists of agricultural property, and, for the purposes of this

definition –

(a) no deduction is made from the market value of property for any debts or

encumbrances (except debts or encumbrances in respect of a dwelling house

which is the only or main residence of the donee or successor and which is

not agricultural property), and

(b) an individual is deemed to be beneficially entitled in possession to –

(i) an interest in expectancy, notwithstanding the definition of "entitled in

possession" in section 2, and

(ii) property which is subject to a discretionary trust under or in consequence

of a disposition made by the individual where the individual is an object of

the trust,”

10. CATCA, section 89(2) (as it applied in 2013) provides the relief and states:

“Except where provided in subsection (6), in so far as any gift or inheritance consists

of agricultural property -

(a) at the date of the gift or at the date of the inheritance, and

(b) at the valuation date,

and is taken by a donee or successor who is, on the valuation date and after taking

the gift or inheritance, a farmer, section 28 (other than subsection (7)(b) of that