CGT on land purchased from parents ??

merble

Hi...I am considering purchasing some land from my parents to build a house, but cant find any confirmation of what CGT they may have to pay. The standard guidelines from the tax office do cover a situation where the land is gifted, but not where money changes hands. I've even called into the Tax Office in Dublin and they weren't able to help me as they'd never come accross it before (??)...they did say they'd look into it and let me know but so far zilch from them..

Has anyone else purchased land to build from a family member - do you know what CGT (and any other charges ?) need to be paid ?

Thanks a mil

Merble

J.Ryan

CGT is based on the profit the seller makes, as this is a family disposal, you should get a professional valuation. after that its normal CGT rules.



I'm open to correction.

merble

Thanks J Ryan. Not sure im with you 100% though...do you mean that the fact that it is a family situation then it might not be a typical CGT situation ? Also not sure of the valuation bit...do you mean its normal CGT on the money that changes hands, and that any diff between that and the valuation would be subject to the cgt free thresholds ?.....

J.Ryan

No

If you buy the land for 200K and its worth 300K 300 goes into the CGT comp, however the other 100K becomes a CAT issue, (I'm a bit rusty on CAT) as it is a gift.

The professional valuation is so that you can defend against the revenue assessment (if they query your valuation). This is a transaction between connected persons, so the Revenue will look to ensure that they are getting their share.

Alan Shore

Hi,

I think you should check out S603A there is relief from CGT on the disposal of a site to child in certain circumstances. Seek professional advice.