Selling 2nd Property - Tax Implications?

Rose_Gold

Just wondering if anyone has an opinion on this. For planning permission purposes my Dad built a house in my name i.e. I get the Property Tax bills etc addressed to me. He is now selling this house .... will I be liable for CGT do you think??

Geuze

Rose_Gold wrote: »

Just wondering if anyone has an opinion on this. For planning permission purposes my Dad built a house in my name i.e. I get the Property Tax bills etc addressed to me. He is now selling this house .... will I be liable for CGT do you think??

Your father built a house which he gifted to you?

You may have been liable to CAT when you received the gift.

Now you own the house, and it is to be sold.

Did you live in it? Your PPR is exempt from CGT on any gain.

If you didn't live it in, then you may be liable to CGT on any gain made.

Did it sell for for the original cost?

Rose_Gold

Geuze wrote: »

Your father built a house which he gifted to you?

You may have been liable to CAT when you received the gift.

Now you own the house, and it is to be sold.

Did you live in it? Your PPR is exempt from CGT on any gain.

If you didn't live it in, then you may be liable to CGT on any gain made.

Did it sell for for the original cost?

No ... he built the house for himself but put it in my name for planning permission to be granted - he wouldn't have gotten the planning permission if it was in his own name. I have never lived in the house ... he has lived in the house since he built it. He is in the process of selling the house at the moment. I'm just afraid that as my name is on the house I will be liable to CGT.

Atlantic Dawn

Who's name are the deeds in?

Rose_Gold

Atlantic Dawn wrote: »

Who's name are the deeds in?

I don't actually know ... I would presume mine is if the Revenue have me down as the registered owner but I honestly don't know. The first I knew about this was when I got the first property tax bill in the post!!

Atlantic Dawn

Rose_Gold wrote: »

I don't actually know ... I would presume mine is if the Revenue have me down as the registered owner but I honestly don't know. The first I knew about this was when I got the first property tax bill in the post!!

Whovevers name is on the deeds will be liable for any tax on the price they acquired/built the house for against the gain they made on the sale. Whatever side deal you did with your father is your own business but the person on the deeds will be liable.

sword1

If you don't know about it i presume the deeds are in your fathers name. I presume he built it on his own land and sold the original house?

Rose_Gold

Atlantic Dawn wrote: »

Whatever side deal you did with your father is your own business but the person on the deeds will be liable.

There was no side deal I can tell you ..... I didn't know I was being used until I got the first property tax bill through my letter box. I live the opposite side of the country to him.

Rose_Gold

sword1 wrote: »

If you don't know about it i presume the deeds are in your fathers name. I presume he built it on his own land and sold the original house?

That's exactly what he did. He couldn't get permission for a second home on the same site so applied for it in my name. He is now selling the second house and moving in with his partner.

Stheno

You need to find out whose name is on the deeds tbh

Rose_Gold

Stheno wrote: »

You need to find out whose name is on the deeds tbh

Looks that way. Thanks a mill for all the help everyone.

Pawwed Rig

A bigger problem here may be as to whether VAT needs to be charged on the sale. OP you could be on the hook for tens of thousands of euro here between CAT, CGT and VAT.
Go see a tax advisor asap.

exaisle

With respect to Pawwed Rig, I don't agree...

Property Tax was originally administered by the local authorities and from their planning records, as far as they knew, it was your house.

My guess is that the deeds of the site (and by extension, the house) are still in the OP's father's name. It wouldn't be at all unusual for a person who isn't the owner of a site to apply for planning permission, and in fact, where there is a site for sale pending granting of permission, it would be the norm.

If there was no transfer of ownership, there's no CAT issue.

Going a bit further along the line of conjecture, I'd suggest that there's no VAT issue here either. There's nothing to suggest that a VAT credit has been claimed on the input or that it was in the course of an "economic activity".

However, I do agree with Pawwed Rig when he advised you to get professional advice!

Pawwed Rig

I can't see a situation where someone becomes the owner of a property without realising it as they would have to sign items in the presence of a solicitor but something dodgey seems to be going on here which would concern me.
Re the VAT - an input credit does not have to be claimed it just needs to be able to be claimed. Also new build rules etc. Is it a development for profit?

exaisle

Pawwed Rig wrote: »

I can't see a situation where someone becomes the owner of a property without realising it as they would have to sign items in the presence of a solicitor but something dodgey seems to be going on here which would concern me.
Re the VAT - an input credit does not have to be claimed it just needs to be able to be claimed. Also new build rules etc. Is it a development for profit?

Dodgy? Yes...in the way the planning permission was obtained, but not by any means unusual. I agree that it's unlikely to have been transferred into the OP's name without their knowledge.

As the OP's father has lived in it since it was completed, it's unlikely to be "for profit"....unless he has made a habit of this....

Pawwed Rig

exaisle wrote: »

As the OP's father has lived in it since it was completed, it's unlikely to be "for profit"....unless he has made a habit of this....

Ah I missed that he had lived in it since built. Agreed on above.

Peregrinus

exaisle wrote: »

Dodgy? Yes...in the way the planning permission was obtained, but not by any means unusual. I agree that it's unlikely to have been transferred into the OP's name without their knowledge.

Nevertheless the Revenue think that the OP is the owner - it's the owner who is liable for property tax, not the person who applied for planning permission - and presumably he hasn't done anything up to this point to correct their misapprehension. And, since he has never lived in the house, the Revenue are going to be under the impression that he has a liability to CGT on the sale of the house.

Time to sort this out, and probably best to be proactive about doing so. As others have said, get professional advice, and specifically get professional advice on how best to get the Revenue's records corrected.

exaisle

CGT is a self assessment tax....it doesn't really matter who revenue think owns the property. The contract for the sale will have the vendor's name on it and it will be stamped by revenue. The seller...whomever that is...will come to their notice at that stage....and they will have to make a return and pay whatever tax is due if any.
I'm not even going to go into the concept of beneficial ownership...
However I do agree that it needs to be sorted out..and fast.

exaisle

CGT is a self assessment tax....it doesn't really matter who revenue think owns the property. The contract for the sale will have the vendor's name on it and it will be stamped by revenue. The seller...whomever that is...will come to their notice at that stage....and they will have to make a return and pay whatever tax is due if any.
I'm not even going to go into the concept of beneficial ownership...
However I do agree that it needs to be sorted out..and fast.

cerastes

Cgt is based on a profit over the purchase price, what's the situation if there is no profit or a loss?

dogsears

Its pretty obvious that OP and his father need professional advice - from both a solicitor and a tax advisor in my view.

Peregrinus

cerastes wrote: »

Cgt is based on a profit over the purchase price, what's the situation if there is no profit or a loss?

If there's no gain, there's no tax.

If there's a loss, there's (a) no tax, and (b) the possibility of setting the loss off against other gains arising in the same year, or carrying it forward to future years and setting it off against gains arising in those years. But you can only set it gains arising on the disposal of chargeable assets, not against income, gifts, inheritances and the like.

Mr. Incognito

This is a great example of why property threads are banned.

Speak to a solicitor