Sep 18

2026

Farming on both sides of the Irish border: the tax and accounts rules that trip families up

A farm operating across Northern Ireland and the Republic of Ireland deals with two tax systems, two currencies and separate agricultural support schemes. Since 6 April 2026, succession planning has also become more important because the UK changed Agricultural Property Relief and Business Property Relief, while Ireland continues to apply its own Capital Acquisitions Tax rules.

Inheritance planning now diverges sharply

For deaths on or after 6 April 2026, the UK gives a combined £2.5 million allowance for qualifying agricultural and business property receiving 100% relief. Any unused allowance can transfer to a surviving spouse or civil partner, potentially increasing the surviving estate’s allowance to £5 million. Qualifying value above the available allowance receives 50% relief. Before other exemptions and nil-rate bands, that can produce an effective IHT exposure of up to 20% on the excess.

Irish Agricultural Relief works differently. It reduces the taxable value of qualifying agricultural property by 90%. The beneficiary must normally satisfy the 80% agricultural-property test and the active farmer rules, farming commercially for at least six years or leasing to someone who does. CAT is currently charged at 33% after applying the relevant group threshold and other reliefs.

Cross-border families therefore need each jurisdiction reviewed separately. Valuation and ownership questions can resemble those discussed in how a private business is valued when a shareholder wants to exit.

Support scheme payments also differ

For 2026, Northern Ireland uses DAERA’s Farm Sustainability Payment, which replaced the Farm Sustainability Transition Payment. In the Republic, the Basic Income Support for Sustainability continues under the EU Common Agricultural Policy. Each scheme has its own eligibility rules, application process and payment timetable.

Where the accounts themselves go wrong

Currency treatment needs a consistent accounting policy rather than ad hoc weekly conversion rates, the same issue covered in what cross-border SMEs get wrong with multi currency accounting.

VAT also needs careful handling. Under the Windsor Framework, Northern Ireland remains aligned with EU VAT rules for movements of goods while remaining within the UK VAT system. Cross-border goods transactions with Ireland can therefore require Northern Ireland businesses to use the “XI” VAT prefix and follow specific acquisition and supply rules. See VAT compliance across the UK and Ireland border.

Farm income averaging also differs. UK farmers can, where eligible, average profits over two or five years. Ireland operates its own five-year farm income averaging regime. The reliefs sit inside separate tax computations, and the UK-Ireland double tax treaty can affect how cross-border business profits and permanent establishments are taxed.

What to check this year

Get current valuations for assets on both sides of the border, confirm which person or entity owns each asset, review support-scheme claims, and document how sterling and euro transactions are translated. Diversified activities such as tourism, contracting and renewable energy should be reviewed separately because they can affect relief qualification and business-property analysis.

Our cross-border accounting and tax specialists can review the overall structure, while our SME business advisory team can help with succession and business planning. Where historic ownership or shared-asset records are unclear, our forensic accounting specialists can help establish the factual position.

If your farm operates on both sides of the border, talk to SCC Chartered Accountants before a sale, gift or succession event makes the structure urgent.