Inheriting a farm or a family business brings a particular kind of pressure: the asset cannot simply be paused while the paperwork catches up. Animals need care, staff need paying, and customers keep arriving. This guide explains how these assets are handled within the wider process of dealing with assets after a death in Ireland, from keeping the business running to valuation and the two major tax reliefs.
It focuses on what happens after a death, not on planning ahead. We set out the practical steps in plain English and point to the official Revenue rules at each stage. None of this is legal or tax advice — farm and business estates are among the most complex, and the figures below should always be confirmed with a qualified adviser before you act on them.
Keeping the farm or business running during administration
The personal representative — the executor named in the will, or the administrator appointed by the court where there is no will — gathers the deceased's assets, pays the debts, and distributes what remains. Their formal authority to do this comes from the Grant of Representation, which can take months to arrive. A trading business cannot wait that long to function.
In the gap before the grant, families usually put practical arrangements in place to keep the business trading: staff are paid, suppliers are managed, and day-to-day decisions are made. These arrangements carry real risk. The personal representative can be personally liable for how the estate's assets are handled. If a going concern is involved, take legal advice early.
Whether the business can continue smoothly also depends on how it is owned. A sole trade is tied to the deceased personally and is most exposed during the wait for a grant. A partnership or limited company has its own legal existence and can usually continue operating, subject to the partnership agreement or the company's constitution. Identifying the ownership structure early shapes every decision that follows.
Valuing a farm or business for the estate
A farm or business is valued at its open-market value as at the date of death, the same principle that governs every other estate asset. The difference is that a going concern is not a single number — it is a bundle of land, equipment, stock, and goodwill, set against loans and trade debts. Each part must be identified and valued in its own right.
Because the figures drive both the probate application and the inheritance tax position, credible professional valuations matter. An under-valuation can be challenged by Revenue; an over-valuation can inflate the tax bill. Where the estate contains a business as well as the usual assets, it will almost certainly fall on the complex side of the line described in our guide to simple versus complex estates.
How a farm or business is valued and reported
Four stages take you from listing the assets to reporting the values to Revenue and the Probate Office.
List every asset and liability of the business
A farm or trading business is rarely a single line on a balance sheet. Identify the land and buildings, livestock, machinery, stock, vehicles, bank balances, debtors, and any goodwill, then set against them the loans, overdrafts, and trade creditors. Each element is valued as at the date of death. Our guide to valuing an estate for probate explains the date-of-death principle in full.
Get professional valuations where needed
Agricultural land, commercial premises, and a going-concern business each need a credible market valuation. A solicitor cannot simply estimate these. Land and buildings usually require a valuer or auctioneer; a trading business may need an accountant to value goodwill and net assets. These figures feed both the probate application and the Capital Acquisitions Tax (CAT) return.
Separate what passes through the estate from what does not
How the business is owned changes everything. A sole trade and solely-owned land pass through the estate and need a grant. A partnership share may pass under a partnership agreement, and shares in a limited company pass according to the company's constitution and any shareholders' agreement. Confirm the ownership structure before assuming an asset is part of the estate.
Report the values to Revenue and the Probate Office
The values are entered on the Statement of Affairs (Probate) Form SA.2 filed with Revenue, which produces the Notice of Acknowledgement needed for the grant. Each beneficiary then reports their own benefit, and claims any Agricultural or Business Relief, on their own IT38 return. Reliefs are claimed by the beneficiary, not by the estate.
The two major reliefs: Agricultural and Business Relief
Ireland's inheritance tax, Capital Acquisitions Tax (CAT), is charged at 33% on the value of a benefit above the beneficiary's tax-free group threshold. For farms and businesses, two reliefs can dramatically reduce the taxable value before that calculation is made. Each reduces the taxable value of qualifying property by 90%, but they apply to different assets and carry different conditions.
These reliefs sit within the wider CAT system explained in our guide to inheritance tax in Ireland. Crucially, both reliefs are claimed by the beneficiary on their own IT38 return, not by the estate — and Revenue requires an IT38 to be filed whenever either relief is claimed, even where no tax would otherwise be due.
What it reduces
Taxable value of qualifying agricultural property
Taxable value of qualifying business property
Reduction
90%
90%
Core tests
80% asset test plus the active-farmer test for the beneficiary; from 1 Jan 2025, the disponer (the person who gave or left the property) must also have met the active-farmer test for six years before death
Property must be 'relevant business property' of a qualifying business
Disponer's holding period
No fixed period, but conditions attach to the asset
5 years before a gift; 2 years before an inheritance on death
Clawback window
Sell within 6 years of the valuation date without reinvesting
Dispose within 6 years of the valuation date without replacing
Agricultural Relief and Business Relief compared. Both reduce the taxable value of qualifying property by 90%. Source: Revenue.
| Feature | Agricultural Relief | Business Relief |
|---|---|---|
| What it reduces | Taxable value of qualifying agricultural property | Taxable value of qualifying business property |
| Reduction | 90% | 90% |
| Core tests | 80% asset test plus the active-farmer test for the beneficiary; from 1 Jan 2025, the disponer (the person who gave or left the property) must also have met the active-farmer test for six years before death | Property must be 'relevant business property' of a qualifying business |
| Disponer's holding period | No fixed period, but conditions attach to the asset | 5 years before a gift; 2 years before an inheritance on death |
| Clawback window | Sell within 6 years of the valuation date without reinvesting | Dispose within 6 years of the valuation date without replacing |
Agricultural Relief in detail
Agricultural Relief reduces the taxable value of qualifying agricultural property by 90% for CAT purposes. Agricultural property broadly includes farmland and buildings situated in the European Union or the United Kingdom (post-Brexit, the UK is explicitly included by statute), together with crops, trees, livestock, bloodstock, and farm machinery on that land. The relief is what makes passing on a working farm achievable without forcing a sale to pay tax.
The first condition is the 80% asset test. On the valuation date, at least 80% of the gross market value of all the beneficiary's property — including the inheritance itself — must consist of agricultural property. Debts are not deducted when applying the test, with one narrow exception: a loan used to buy, improve or repair the beneficiary's own home, where that home is not agricultural property.
The second condition is the active-farmer test. The beneficiary must either farm the property on a commercial basis for at least six years from the valuation date, or lease it for at least six years to someone who does. In either case, the person doing the farming must hold a trained farmer qualification (as defined under section 654A of the Taxes Consolidation Act 1997) or spend at least 50% of their normal working time farming agricultural land.
From 1 January 2025, the Finance Act 2024 added a new condition on the disponer — the person who made the gift or, in the case of an inheritance, the person who died. They must also have satisfied the active-farmer test for the six years immediately before the date of gift or death. In plain terms: the deceased must have farmed commercially or leased to an active farmer during that period.
A transitional arrangement eases this for transfers between 1 January 2025 and 31 December 2030. During that window, the six-year period runs from 1 January 2025, so the deceased only needs to show compliance from that date up to death. This is a significant condition. If the deceased had stopped farming and was not leasing to an active farmer, relief may be denied entirely — even if the beneficiary fully qualifies on their own side.
Business Relief in detail
Business Relief reduces the taxable value of qualifying business property by 90% for CAT purposes. It applies to a business, a share in a business, or shares and securities of a company carrying on a business — what Revenue calls “relevant business property”. It does not apply to individual assets on their own, even where they were used in the business.
Relevant business property includes a sole trade such as a shop or pub, an interest in a partnership, qualifying shares in an unquoted company, and land, buildings, plant or machinery used in a business carried on by a company or partnership the disponer controlled. The relief targets genuine trading enterprises being passed on as going concerns rather than isolated assets.
The disponer must also have owned the property for a minimum period. For an inheritance on death, they must have owned the relevant business property for at least two years immediately before death. For a gift, the minimum is five years. In certain cases, time the property was held by a spouse, civil partner, or trustee counts toward that period.
Some businesses are excluded. Relief is not available where a business consists wholly or mainly — meaning more than 50% — of dealing in currencies, securities, stocks or shares, land or buildings, or making or holding investments. Separately, “excepted assets” not used for the business are left out of the 90% reduction, so a trading company holding a large investment portfolio gets relief only on its trading element.
Should you get professional help?
Estates containing a farm or trading business are among the most complex to administer. Valuations must stand up to scrutiny, the business often cannot stop trading, and the reliefs carry detailed conditions and a six-year clawback risk that can reverse a tax saving years later. This is well beyond a routine personal application.
Most families in this position work with a solicitor for the probate process and a tax adviser for the CAT reliefs. The cost of that advice tends to be modest against the value at stake — and against the risk of a clawback or a challenged valuation. If you are weighing up where to start, our overview of dealing with assets after death explains how the whole estate fits together.