Gift Tax

reetz

Real quick scenario.

Given side garden to build a house from grandparents.

Lets say today the small patch of garden would get 200k if sold (Today's Value)

When looking online grandchild falls under group b of tax threshold, 32,500.

Am i looking at close to 60k tax bill ?

barneystinson

reetz wrote: »

Real quick scenario.

Given side garden to build a house from grandparents.

Lets say today the small patch of garden would get 200k if sold (Today's Value)

When looking online grandchild falls under group b of tax threshold, 32,500.

Am i looking at close to 60k tax bill ?

Correct. Lucky you though, getting 200k worth of land for 60k.

heretothere

Yes, I am getting €55,061
I'd hold off till after the budget I have heard speculation that CAT will be going down. Of course speculation could be wrong and it may go up! It's up to you.

beechwood55

Could the grandparents give it to their child (your parent). And then your parent give it to you? Would that work legally? Or would Revenue smell a rat and investigate?

Spanish Eyes

beechwood55 wrote: »

Could the grandparents give it to their child (your parent). And then your parent give it to you? Would that work legally? Or would Revenue smell a rat and investigate?

That can be done but only after three years of the first gift. It's called gift splitting.

Gift splitting
If a gift is passed on to someone in a different group within three years of when it was received it is called gift splitting. Gift splitting affects the threshold used.

Example
In January 2009, a father gives €250,000 to his son. In October 2009, the son gives his daughter a house valued at €250,000.

For tax purposes, the daughter has taken the gift from her grandfather, not from her father. The Group B threshold applies to her gift, not Group A.


http://www.revenue.ie/en/gains-gifts-and-inheritance/gift-and-inheritance-tax-cat/how-do-you-calculate-cat.aspx

heretothere

Also the parent would then loose €200k of their tax free threshold. Which if a corner of the garden is worth that much there's a decent chance the rest of the plot/ house is worth a nice bit!

myshirt

Spend 1,500 on some tax advice, there are ways to mitigate the tax here.

Heisenburg81

myshirt wrote: »

Spend 1,500 on some tax advice, there are ways to mitigate the tax here.

Really?