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Moving Home

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  • 12-05-2009 5:19pm
    #1
    I'm
    Closed Accounts Posts: 37 ✭


    Folks,

    This is perhaps a little bit off topic - but I thought I'd chance posting to see if anybody had any similiar experience.

    I moved from Cavan to Belfast 10 years ago for college and am now starting the process of getting a planning permission on a plot of land at home with the intention of moving back. I bought a house in Belfast 5 years ago, so I'm wondering what is the most tax efficient way to move - i.e. should I sell in Belfast during the build as my primary residence will move to Cavan - thereby avoiding a subsequent tax on the sale should I sell the Belfast house in the future ?

    Mods, please feel free to move if the question is too unrelated to this section - I hoping somebody building might have a simliar experience.

    Thanks


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    #2
    muffler
    Registered Users Posts: 45,868 ✭✭✭✭muffler


    Probably more suited to Accommodation & Property.

    Moved from C & P.


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    #3
    partyguinness
    Registered Users Posts: 8,207 ✭✭✭partyguinness


    First you are looking at 3 possible tax liabilities:-

    1. Capital Gains Tax- There is no CGT on selling our principal private residence in Ireland and I am 99% sure this is also the case under UK tax law but you may want to clarify this.

    2. Capital Acquisitions Tax- The plot is a gift from your parents? You have up to €434,000 tax free from parent (prior gifts are taken into account).

    3. Stamp Duty- The transfer will have to stamped but again there is a relief when a site (up to 1 acre) is transferred from parent to child to build a house of up to €500,000.

    That should be it.


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    #4
    I'm
    Closed Accounts Posts: 37 ✭I'm


    Thanks for the help partyguinness, the plot is a gift to my wife from her parents and the house will be under €500k.

    My worry was that as my primary residence will become Cavan that I would be liable to tax on the sale of the Belfast home - I don't particularily want to sell in the next year or two, so it looks like I need to maintain the house in Belfast as my primary residence until I sell.

    Thanks again


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    #5
    partyguinness
    Registered Users Posts: 8,207 ✭✭✭partyguinness


    Ok so a gift to your wife. Now this presents a different set of problems vis a vis CAT. You are now deemed to have received a gift from her parents of a one half share of the property...liable to CAT as you are a stranger in blood...Group C....BUT there is a relief that the Revenue will allow which means you wont get hit for CAT. If you apply for a mortgage jointly, make sure the Letter of Offer states that the a. its for building purposes and b. that the site must be transferred into joint names. Then when applying for CAT clearance, show them the Letter of Offer condition and they will allow it. Your solicitor can do this. Make sure its part of the fee you pay them...;) Until then, keep the property in her sole name. There is no Stamp Duty between married couples so it can be subsequently transferred.

    Now as regards the change of residency, you have up to one year to avail of the Principal Private Residence relief under CGT...but thats in ROI..I am afraid that you will need someone with UK tax knowledge to see if the same applies there...but I am guessing its the same.


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