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Gift tax query

  • 25-03-2018 10:08pm
    #1
    Registered Users, Registered Users 2 Posts: 863 ✭✭✭


    Hi ,just wondering if the following is allowed by Revenue as a means to reduce CGT.

    Selling a property to a sibling.
    I reduce the value by 32k as 'gift' to my sibling.
    They v shortly afterwards gift me back 32k euro.


Comments

  • Closed Accounts Posts: 322 ✭✭Heisenburg81


    Rooy wrote: »
    Hi ,just wondering if the following is allowed by Revenue as a means to reduce CGT.

    Selling a property to a sibling.
    I reduce the value by 32k as 'gift' to my sibling.
    They v shortly afterwards gift me back 32k euro.

    Market value is imposed as the sales price in transactions between connected persons.


  • Registered Users, Registered Users 2 Posts: 566 ✭✭✭hjr


    From Tax and Duty Manual:

    Section 548 contains rules for determining market value where this is
    required for capital gains tax purposes. The situations where the market
    value of an asset is of importance for capital gains tax purposes include assets
    passing on death, transfers by gift and other transfers by means of bargains
    not at arm’s length...

    This would rule out your solution I'm afraid.....


  • Registered Users, Registered Users 2 Posts: 863 ✭✭✭Rooy


    Thanks for the feedback , I did see this on Revenue.ie :

    Property transferred as a gift or inheritance :
    You may transfer a property with no money paid, or where the amount paid is less than market value. Revenue treat this transfer as a gift, and CAT may be due. We may also charge Stamp Duty on the market value of the property. The person who receives the property pays the Stamp Duty.


    Which is where i believe , for example , property market value of 200k , that I could sell at 170k to sibling and deem the difference to be a gift.


  • Posts: 17,728 ✭✭✭✭ [Deleted User]


    Rooy wrote: »
    ............... I did see this on Revenue.ie :

    ..............Property transferred as a gift or inheritance.....................

    Which is where i believe , for example , property market value of 200k , that I could sell at 170k to sibling and deem the difference to be a gift.

    They are referring to transfer of the entire property as a gift :)


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