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Gift tax on land

  • 25-10-2007 10:06am
    #1
    eclair21
    Closed Accounts Posts: 8 ✭


    Not sure if this is the correct place for this but hopefully someone will be able to help.

    I am trying to understand the tax implications of receiving a site of land from my father. Do I have to pay gift tax on the site, and how is this calculated?
    If I buy the site from my father at a lower price than the market value am I still liable for tax?


Comments

  • #2
    Owen
    Registered Users, Registered Users 2 Posts: 12,683 ✭✭✭✭Owen


    If you're a direct relative of the giver, ie: Son, Wife, Daughter, you're allowed to receive up to €496,824 Euro :

    http://www.revenue.ie/index.htm?/revguide/capitalacquisitionstax.htm


  • #3
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Business Accountancy would be ther proper place to post.

    I'm sure a mod will move it. Transfers from a parent to a child under € 496,824 (2007 threshold) are exempt form CAT (Capital Acquisitions Tax) providing that there have been no previous gifts. If so -you deduct the value of the previous gifts from the threshold.


  • #4
    smashey
    Registered Users, Registered Users 2 Posts: 21,676 ✭✭✭✭smashey


    Moved to Business<<Accountancy.


  • #5
    eclair21
    Closed Accounts Posts: 8 ✭eclair21


    Also in terms of a gift of a house, is it correct that you are completely exempt from gift tax if you have lived in the house for 3 years?
    What sort of proof would be needed to show you have lived in the house for that length of time?


  • #6
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Sorry- filing deadlines.

    S 59C of the CATA 1976 provides an exemption to dwelling houses up to an acre where the donee /sucessor has resided there for three years previous to the gift and does not dispose of the house with in 6 years. If there is a disposal the exemption is clawed back.

    Proof of residence is common sense. Bills etc.

    In your case you are buying a site so unless you've been out there camping I can't see how this would apply.

    The best way to do this is a transfer without planning permission for agricultural value. Provided you're going to slap up planning permission for a principal private residence subsequent won't affect the transaction. If it's an investment you'll get stung for CGT later on when you sell so there are pros and cons depending on the intention. If you want to build a personal home that's the route I'd go. If it's an investment property any savings on CAT are going to increase your CGT bill later.

    You parents have an exemption from CGT under a transfer of a site to a child exemption.


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