buy instead of inherit?

caddy2

my father inherited a house and business from his sister and paid tax on the valuation. he has to keep the business for 5 years until he can pass it to me where i then will have to pay tax on that. i had wondered, would it be possible for me to buy the business from my father after the 5 years?

professore

I'm not an account or solicitor, so take proper advice from someone more qualified, terms and conditions apply etc.

As I understand it, presumably in that case your father will pay the tax on the money you pay him. It would probably be more, as there are tax exemption thresholds for gifts between parents and children:

http://www.irishtimes.com/business/personal-finance/small-gift-exemption-avoids-revenue-rules-on-cat-aggregation-1.1929433

caddy2

thank you Professore for your time and input.
i did wonder would a sale of the property be treated differently....

thank you

dogsears

caddy2 wrote: »

thank you Professore for your time and input.
i did wonder would a sale of the property be treated differently....

thank you

Bear in mind if you get a gift from your father, the whole gift is taken into account for gift tax, and then your exemptions etc are taken into account in calculating your gift tax cost.

But your father is also liable to Capital Gains Tax on his "profit" which is based on the uplift in value since he acquired it from his sister (even though the profit is illusory since its a gift). And when both Gift tax and CGT arise on the same event, one can be set against the other. In effect between you, you pay the higher of the 2 taxes.

Whereas if you buy it from him (leaving aside the immensely important question of funding that acquisition), there is no gift tax for you but your father's tax is much the same as above.

And if that has you scratching your head - well that's why you need to consult a professional advisor on this!

Mr. Incognito

Property advice is banned. Consult a professional

hfallada

Speak to a tax advisor OP. They are experts on minimising tax liability

caddy2

Thank you, I very much appreciate your advice

caddy2

Thank you

caddy2

Thank you.
It all looks quiet confusing all right