The Gazette 1985

GAZETTE

APRIL 1985

Accordingly, it would appear that the definition of "business" is a wide one for the purposes of the relief, and whether or not a particular activity will be accepted as being a business will depend on the particular circumstances of each case. B. 'Carrying On or Assisting in Carrying On' Paragraph 9 makes a clear distinction between "carrying on" and "assisting in carrying on" a business. It would appear that the use of the former term does not mean that the nephew must take over the business completely, in that the uncle has to retain ultimate control. In A.E. -v- Revenue Commissioners, Judge Sheridan emphasised that Mrs. A.E. was ". . . under the ultimate authority" of her uncle, and stated that 21 : "the disponer must remain the dominant person in whose hands the ultimate decision as to the management of the land must be made". In that case, the uncle received all of the letting moneys, and any farming profits. Judge Sheridan also remarked that Mrs. A.E. could take the business as she found it, and it was not necessary for her to impose her own regime. Neither had she to prove that she had taken over the entire running of the farm 22 . (5) 'Property Used in Connection with the Trade, Business, Profession, Office or Employment' The property comprised in the gift or inheritance for which relief is sought must have been used in connection with the trade, business, profession, office or employment. Thus, if a farmer left his entire estate to his nephew who qualified under Paragraph 9, and the estate included the proceeds of life assurance policies and personal investments, the latter assets would not be subject to the relief. The practice of the Revenue Commissioners prior to the Finance Act 1984 was to assess tax on the two kinds of property at the effective rate that would have been payable if the entire inheritance was taken under the relevant Table 23 . This has now changed because of the method introduced by FA 1984, of calculating tax by aggregating gifts and inheritances taken from all sources since 2 June 1982. The calculation of the tax liability is quite complicated and, where a combination of business and non-business assets is taken, different liabilities may arise depending on the mixture of assets taken by the nephew. Example 1 Richard Devereux, who qualifies under Paragraph 9, takes the following inheritance from his uncle, a farmer:—

'Our Progressive and Professional Team' OUR PROFESSIONAL SERVICES VALUATIONS RENT REVIEWS LEASE RENEWALS ARBITRATIONS CAPITAL GAINS AND PROBATE VALUATION RATING APPEALS AND INSURANCE VALUATION COMPULSORY PURCHASE ORDERS OUR VALUATION TEAM Anthony M. Sherry F.S.VA, F.IAV.I.

Gordon H. Gill F.R.I.C.S. Philip G. Sherry A.R.I.C.S.

JEm

W,

Farmland (Net of Agricultural Relief) Personal Investments

160,000 Business Assets - Relief

40,000 Other Assets - No Relief 200,000

Because Richard is deemed to take the land from a parent, the "threshold amount" relating to the farmland

93