Favourite Nephew or Niece Relief
You may qualify for Favourite Nephew or Niece relief if you receive a gift or inheritance of business assets. The relief allows the use of the Group A threshold. This is subject to conditions.
For the purpose of this relief, you are a nephew or niece if you are:
- the child of the disponer’s brother
- the child of the disponer’s sister
- the child of the disponer’s brother's civil partner
- the child of the disponer’s sister's civil partner.
Conditions for the relief
You must have worked for the disponer for the five years immediately before receiving the gift or inheritance. During these five years, you must have worked for more than:
- 24 hours per week at the place of business
- or
- 15 hours per week at the place of business where the business is carried on exclusively by you and either the:
- disponer
- the disponer's spouse or civil partner.
The relief applies only to assets used in the business. Group B threshold applies to non-business assets.
Where the gift or inheritance includes business and non-business assets, liabilities must be apportioned between business and non-business assets.
What if there is an intervening life interest?
Where there is an intervening life interest, you must have worked in the business for five years before the death of the disponer.
- Example
John died in 2016. In his will, he left his business to his wife, Mary, for her life and, on her death, to John's niece, Anne. Anne has worked full time in the business since 2010.
Mary died in 2020 and Anne inherited the business. Anne qualifies for Favourite Niece Relief because she worked in the business for five years before John's death. Anne does not need to have worked for Mary.
Shares and Favourite Nephew or Niece Relief
You may qualify for this relief if you receive a gift or inheritance of shares in a private company. The company must be a private trading company in which the disponer is a director, and controls the company.
Discretionary trusts and Favourite Nephew or Niece Relief
You do not qualify for Favourite Nephew or Niece Relief if the benefit is received from a discretionary trust set up by the disponer.
How to claim the relief
To claim the Favourite Nephew/Niece Relief on business assets, you need to file a CAT return Form IT38 online. You must file the return through myAccount or Revenue Online Service (ROS).
To claim the relief on your IT38 return:
- select ‘Child of Brother or Sister’ from the ‘Relationships of Beneficiary to Disponer’ dropdown menu, on the Disponer Details page
- and
- tick ‘Favourite Nephew/Niece Relief’ on the Reliefs & Exemptions page.