The tax-free threshold which family members can avail of when inheriting a house or land is set to increase from €335,000 to €400,000.

Minister for Finance Jack Chambers confirmed that the threshold on the standard rate of capital acquisition tax will be increased in Tuesday's budget.

This means that a child, niece or nephew can be gifted or inherit up to €400,000 before they incur gift or inheritance tax.

However, as the average family farm transfer well exceeds this value, typically a child that qualifies for either agricultural relief or business relief will be better off financially.

The benefit of availing of agricultural relief is that it reduces the taxable value of the gift or inheritance of agricultural property by 90%.

Reform

An Taoiseach Simon Harris said at this year's Ploughing in Ratheniska, Co Laois, that there needs to be a “radical reform” of succession and inheritance tax in the years ahead to assist the next generation of farmers.

Speaking to the Irish Farmers Journal , he said: “Unfairnesses, anomalies and also the impact on farmers and the likes are issues that are being seriously considered in the run-up to the budget,” he said.

“I do think we need to be mindful of the fact that farm and house prices have risen and inheritance tax rates haven’t,” An Taoiseach said.