CGT and all of that.

AlekSmart

Any opinions or educated guesses as to the following hypothetical situation re a property disposal.

Seperated individual with two adult children,both of whom living elsewhere (UK and Germany).
Mr Seperated had inhereted house from parent and owned it for 10 years since owners death.

House now sold and Mr Seperated wishes to endow each child with a sum from the sale proceeds.

Essential question is how best to minimise the CGT liability and also are there any specific methods of transferring the cash to the children,for example would it be better to deposit in an Irish bank or transfer directly to UK and German banks ?

Thoughts anybody ???

Mr. Incognito

well Hypothetically

CGT arose on the sale. I presume PPR (Principal private residence relief) was claimed if disponer was living in the house.

Now that Mr Seperated has the cash in hand and is giving it to his children CAT and not CGT arises on the gift.

The threshold that can be given to each child tax free in 2009 is 542,544 so unless the house was sold for more that 1,090,000 no CAT should arise. If the value of the gift is over 80% of the threshold a CAT return is still required nothwithstanding the fact there is no liability.

A CGT/CAT set off is not applicable as they are seperate transactions, i.e sale of house to third party, gift of proceeds to children.

That's from an Irish perspective.

UK and German tax authorities may have a provision to tax the receipts if they are remitted into their countries by a resident individual. I'm no expert on German or UK tax codes.

bishops palace

Mr. Incognito wrote: »

The threshold that can be given to each child tax free in 2009 is 542,544 so unless the house was sold for more that 1,090,000 no CAT should arise.

The threshold was reduced to 434,000 on 8th April 2009.

AlekSmart

Thanks Mr Incognito and Bishops Palace.
My pal is the most Irish of individuals when it comes to "Affairs of State" and has the longest fingers I know of,upon which everything to do with Tax and stuff is placed.

Hw was NOT using the house as principal residence but renting it out,would that make an appreciable difference?

Both children have lived and worked abroad for many years now but have Credit Union and bank accounts still active back home.

The Dad`s original idea was simply to lodge the respective amounts into these accounts and walk away.
I have been prodding him to assess the state of play with the idea of depriving the Irish Revenue of every cent which it is legally possible to do,given that we all are now completely supporting the lifestyles of some 50 property developers !!
It would be interesting to see if any on-line resource exists whereby the various EU Tax areas can be compared side by side ???

Thanks Again all.