GIRT Tax, capital acquisition tax and stamp duty

Dave1979

Hi all,

My question is inrelation to capital acquisition tax and stamp duty on a gift.
I'm planning to give my brother a 1 acre site valued at 60,000 euro as a gift to him to build a house on
Can anyone confirm the Capital acquisition tax group thresholds this will come under and how much CAT and stamp duty I would have to pay

Regards
Dave

Dave1979

My question is inrelation to capital acquisition tax and stamp duty on a gift.
I'm planning to give my brother a 1 acre site valued at 60,000 euro as a gift to him to build a house on
Can anyone confirm the Capital acquisition tax group thresholds this will come under and how much CAT and stamp duty I would have to pay

Regards
Dave[/quote]

Legend100

Hi Dave,

Well first of all, those taxes would be payable by your brother and not u (unless u opt to pay for them and this would have to be incorporated into the gift tax computation) as he is receiving the gift.

You will be liable to CGT on the gift of the site. Cant give you an amount off hand coz would depend on what the cost of the site was initially to you and when you got it. its basically the value of the gift 60k less the cost (indexed for inflation if bought before 2003)less annual exemption of 1270 and the result being taxed at 25%

You brother would fall into group 2 of the CAT threshold which since the supplementary budget is 43,400. He would get a 3000 exemption so CAT at 25% would be payable on the balance as long as he has not received any gifts/inheritances from this threshold previously. There is a possibility that he could offset the CGT you pay on disposal against this CAT but you are better off seeking professional advice to get the maximum relief available

Dave1979

Legend100 wrote: »

Hi Dave,

Well first of all, those taxes would be payable by your brother and not u (unless u opt to pay for them and this would have to be incorporated into the gift tax computation) as he is receiving the gift.

You will be liable to CGT on the gift of the site. Cant give you an amount off hand coz would depend on what the cost of the site was initially to you and when you got it. its basically the value of the gift 60k less the cost (indexed for inflation if bought before 2003)less annual exemption of 1270 and the result being taxed at 25%

You brother would fall into group 2 of the CAT threshold which since the supplementary budget is 43,400. He would get a 3000 exemption so CAT at 25% would be payable on the balance as long as he has not received any gifts/inheritances from this threshold previously. There is a possibility that he could offset the CGT you pay on disposal against this CAT but you are better off seeking professional advice to get the maximum relief available

Hi Legend

Sorry yes it is my brother who would be paying the CAT
just one more question you said the cost would depend too when I got the land myself I inherit the land in 2002 from my parents and didnt pay any CAT only about 1600 euro stamp duty as it was in group 1

So my brother will be tax free on the first 43,400 euro and taxed at 25% on the rest
and i will have to pay a percentage of CGT on the gift disposal ?

Legend100

The deemed market value on your inheritance would be the base cost for the disposal. Did you go to an accountant when you inherited the site? the accountant/solicitor would have had a 2002 value at the time which the revenue would know about and this is your "cost"

For you
So if you gift the site for 60k
The cost will be the market value in 2002 indexed by 1 year as indexation stopped in 2003 and you take this off the 60k
Take of 1270 annual exemption
Balance taxable at 25% (Capital Gains tax)

For your brother
He receives a gift from you of 60k
Less annual exemption from you of 3000 leaving 57k
Less stamp payable (not sure how much, best ask a solicitor, i think it would be 2% (4% by a half - close relative relief) but not 100% sure on this- so say less 1200 leaving 55800
Less group 2 threshold 43400...Providing hasnt received gift from group 2 before
Taxable 12400
CAT 25% 3100

Your brother can claim a credit against this CAT with the CGT you will pay on the disposal but limited to the CAT. ie you cannot be get a refund if the CGT is higher than the CAT. Your brother must hold onto the site for 3 years so as to avoid a clawback of the CGT/CAT credit

Dave1979

Legend100 wrote: »

The deemed market value on your inheritance would be the base cost for the disposal. Did you go to an accountant when you inherited the site? the accountant/solicitor would have had a 2002 value at the time which the revenue would know about and this is your "cost"

For you
So if you gift the site for 60k
The cost will be the market value in 2002 indexed by 1 year as indexation stopped in 2003 and you take this off the 60k
Take of 1270 annual exemption
Balance taxable at 25% (Capital Gains tax)

For your brother
He receives a gift from you of 60k
Less annual exemption from you of 3000 leaving 57k
Less stamp payable (not sure how much, best ask a solicitor, i think it would be 2% (4% by a half - close relative relief) but not 100% sure on this- so say less 1200 leaving 55800
Less group 2 threshold 43400...Providing hasnt received gift from group 2 before
Taxable 12400
CAT 25% 3100

Your brother can claim a credit against this CAT with the CGT you will pay on the disposal but limited to the CAT. ie you cannot be get a refund if the CGT is higher than the CAT. Your brother must hold onto the site for 3 years so as to avoid a clawback of the CGT/CAT credit

THANKS Legend for your help all clear now cheers!

Regards
Dave