Gift of land from parent to child

teacher30

Gift of land from parent to child
Can anyone help?!!

My mother is giving me land on which i'm going to build my own house (with derelict existing house on it for which we have permission to demolish). I have permission to build but now I found out that my mother is liable for 25% capital gains tax -- eventhough she has no gain! Crazy but the governemnt is screwing everyone for money any way they can.It's 20,000 euro approx. Is there any way out of this?

Solicitor told me that if my mum and i own the land jointly, the bank won't give me a mortgage.

Any ideas? Thank you so much for taking the time to read this

nompere

Of course she can be making a gain - it's the difference between what it was worth when she got it and what it's worth now.

That's been the law since 1974 - nothing to with this government.

Get professional advice.

AugustusMinimus

teacher30 wrote: »

Gift of land from parent to child
Can anyone help?!!

My mother is giving me land on which i'm going to build my own house (with derelict existing house on it for which we have permission to demolish). I have permission to build but now I found out that my mother is liable for 25% capital gains tax -- eventhough she has no gain! Crazy but the governemnt is screwing everyone for money any way they can.It's 20,000 euro approx. Is there any way out of this?

Solicitor told me that if my mum and i own the land jointly, the bank won't give me a mortgage.

Any ideas? Thank you so much for taking the time to read this

There is an exemption on a parent giving a site to a child to build their first principal private residence as long as

1. The site is worth no more than €254,000
2. The site is less than 1 acre
3. You must live in the new house for at least 3 years before selling it.

Did your accountant do up this CGT computation ? Ask him or her can you claim transfer of a site from parent to child exemption.

http://www.revenue.ie/en/tax/cgt/cgt-faqs.html

barneystinson

The limit for site value is now €500k as far as I know.

teacher30

Thanks for taking the time to reply.

Unfortunately, all this changed in the budget on Dec. 7th. There is no escape now from CGT, as the Parent to Child site transfer exemption has been abolished. (Citizen's Advice site)
Had they given prior warning, I wouldn't be quite so angry! They just landed this out of the blue.

teacher30

My solicitor told me all this last week but I may speak to a Tax Advisor. She wasn't very clear in her explanations to be honest!

barneystinson

teacher30 wrote: »

Thanks for taking the time to reply.

Unfortunately, all this changed in the budget on Dec. 7th. There is no escape now from CGT, as the Parent to Child site transfer exemption has been abolished. (Citizen's Advice site)
Had they given prior warning, I wouldn't be quite so angry! They just landed this out of the blue.

I think you're getting CGT mixed up with Stamp Duty here. They abolished the exemption from stamp duty on the transfer of a site from a parent to a child. There were no changes to CGT in the budget.
Check out pages 4 & 5 of this handy budget summary:
http://www.revenue.ie/en/press/budget/2011/budget-2011-summary.pdf

So basically, talk to a tax adviser who knows what they're on about as a matter of urgency, because your solicitor seems to be a bit mixed up here...

Benincasa

OP: I really feel for you. I was in this exact same situation myself 3 years ago. Thankfully the land was valued under the threshold so we didn't have to pay tax. I did hear that something had changed on this in the Budget, however I doubt the exemption was completely scrapped, more likely the threshold was lowered.

It is a truly crazy situation. It is socially and economically beneficial for parents to give land to their children so they can live nearby. This keeps families close by to help with rearing children and to help when parents get older. Forcing people to pay tens of thousands of tax for giving a gift to their children, from which they make no personal monetary gain, is truly crazy.

I really hope it works out for you.

Mr. Incognito

Property thread.

Closed.