Gift Tax Never Paid

beardyman084

If a person (who was/is completely ignorant of tax law) received property as a gift from a parent in the early 80's and was not instructed by the solicitor dealing with the conveyance or aware at any time that it had to be declared is now aware that that may have been the case, how easy is it to rectify the situation and how would one go about it?

If gift tax were due what kind of interest/fine would be payable given the amount of time that has elapsed? Conversely, were it not due would a fine be imposed for failing to declare it?

I see that currently a gift of up to €414,799 is allowed in such circumstances - could anyone tell me what that figure would have been in the early 80's?

And lastly, in general, if a gift of property is made to someone without any other means with which to pay the tax, is the norm to borrow against the property? When exactly would the tax be due?

Thanks for any replies, very confused!

dbran

Hi

(Before this thread gets closed :-))

1) Unfortunately ignorance of the law is not an excuse. Dont even think of going there. The only way to rectify it is to calculate and then pay the tax plus the interest and penalties. You will also need to get someone around who has a fair idea of the rules as they were then as I believe self assessment was not around in the 80s or else you are happy to pay extra for them to look stuff up for you.

2) To rectify the situation you will need to make a voluntary disclosure to the revenue of the full extent of the tax. If the inheritance was back in the 80s I would expect that the interest and penalties will be sizable. The fact that you didnt go to a professional accountant to get professional advise in the last 30 odd years will count heavily against you with regard to the mitigation of penalties. You have acted recklessly by not seeking professional advise.

3) The revenue dont care where you get the money from. If you dont pay they will make you sell the property and then persue you for the balance.

Sorry its not better news

Kind Regards

dbran

nompere

The strange thing is that S.59 CAT Consolidation Act 2003 actually gives the Revenue Commissioners much more discretion in doing deals than they are allowed in (for example) income tax cases.

This is subsection (3):

(3) If, after the expiration of 20 years from the date on which any
tax became due and payable, the tax or any part of that tax remains
unpaid, the Commissioners may, if they think fit, remit the payment
of such tax or any part of that tax and all or any interest on that tax.

Get professional assistance - things may not be as bleak as they look at first instance.

DBran is absolutely right, though - don't act like an ostrich. Get it sorted out.

beardyman084

Thanks folks-only became aware of it myself and trying to help get it sorted.

I'm almost certain the exception for dwelling houses where the donee resided there for 3 years prior and doesn't dispose within 6 years would apply - i'm not entirely sure how easy it will be to prove it though.

Given that 6 years must pass for the exception to apply, what happens in the interim? For example, if I'm living in a property for 3 years which i then receive as a gift and intend not to dispose of for a further 6 years, what action do i take? Is the tax paid and refunded after the 6 years or is no tax payable unless i dispose of the property?

In general, if a gift is made which is under the relevant threshold is it necessary to submit anything to the tax office at all?

Obviously we'll be seeking professional advice in relation to the whole thing but I'd just like to get some kind of handle on the situation beforehand - I'm completely clueless when it comes to this stuff.

Thanks again for the replies, they're greatly appreciated.

exaisle

beardyman084 wrote: »

......and was not instructed by the solicitor dealing with the conveyance or aware at any time that it had to be declared...

It wasn't his job to advise you on your tax status.

Still, as is the case in many situations like this, things may not be as bad as you fear. The threshold for Gift Tax (Capital Acquisitions Tax) for gifts from parents to their children around the early 80's was £150,000....and in fairness, in 1985, £150,000 would have bought a big chunk of property.

E.

Mr. Incognito

Property thread.

You lot know the rules.

Read the charter.

Seek advice from a competant tax professional.