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Tax

  • 22-11-2018 3:55pm
    #1
    Grainne1986
    Registered Users, Registered Users 2 Posts: 10 ✭


    Myself and my husband are purchasing a house. It is my family home. The value of the house is 300k and we have agreed to buy it for 200k. Something was said that my husband would be liable for tax as we are getting a gift. Does anyone know how much tax he would have to pay or could give me any information about it?


Comments

  • #2
    mkdon05
    Registered Users, Registered Users 2 Posts: 766 ✭✭✭mkdon05


    he is effectively getting a 50K gift from your parents.50,000 - 16,250 (group 3 threshold) - 3000 small gift exemption = 30,750 @ 33% = 10,148 Capital Aquisition tax


  • #3
    Grainne1986
    Registered Users, Registered Users 2 Posts: 10 ✭Grainne1986


    mkdon05 wrote: »
    he is effectively getting a 50K gift from your parents.50,000 - 16,250 (group 3 threshold) - 3000 small gift exemption = 30,750 @ 33% = 10,148 Capital Aquisition tax

    I spoke to a solicitor and she was saying if we do it through her we would get some sort of contract drawn up and he wouldn't have to pay it? Would not go into detail until we engaged her and agreed to pay fees. Just afraid to hand over 750 and then still have to pay the money


  • #4
    TaxPro
    Registered Users, Registered Users 2 Posts: 33 ✭TaxPro


    Presumably it could be structured in a way that your husband is considered to be paying 150k and you 50k? That way, he'll have paid his share and not received any gift and you'll have a gift of 100k which is within the Group A threshold.


  • #5
    Grainne1986
    Registered Users, Registered Users 2 Posts: 10 ✭Grainne1986


    TaxPro wrote: »
    Presumably it could be structured in a way that your husband is considered to be paying 150k and you 50k? That way, he'll have paid his share and not received any gift and you'll have a gift of 100k which is within the Group A threshold.

    Looks like they are going to move around his tax credits for a period of time so there won't be a lump sum it would be over time.


  • #6
    scheister
    Registered Users, Registered Users 2 Posts: 1,310 ✭✭✭scheister


    TaxPro wrote: »
    Presumably it could be structured in a way that your husband is considered to be paying 150k and you 50k? That way, he'll have paid his share and not received any gift and you'll have a gift of 100k which is within the Group A threshold.

    Yea there are two standard ways to do it,

    Under the above the house is owed 50/50 afterwards

    The other option is that ye each pay 100k towards the house and the gift from your parents is intended only for you. As a result you will own 66.6% of the house and your OH will own 33.3%. If going with this option ensure contacts are done right as there is a recent tax appeal case where it was done wrong.


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  • #7
    TitianGerm
    Registered Users, Registered Users 2 Posts: 28,712 ✭✭✭✭TitianGerm


    Grainne1986 wrote: »
    Looks like they are going to move around his tax credits for a period of time so there won't be a lump sum it would be over time.

    Tax credits have nothing to do with CAT.


  • #8
    Grainne1986
    Registered Users, Registered Users 2 Posts: 10 ✭Grainne1986


    TitianGerm wrote: »
    Tax credits have nothing to do with CAT.

    Have been speaking to the revenue today and they have said that because my siblings will be paying capital gains tax that myself or my husband won't have to pay it because it would be double taxation. Can anyone explain?


  • #9
    scheister
    Registered Users, Registered Users 2 Posts: 1,310 ✭✭✭scheister


    Grainne1986 wrote: »
    Have been speaking to the revenue today and they have said that because my siblings will be paying capital gains tax that myself or my husband won't have to pay it because it would be double taxation. Can anyone explain?

    Who currently owns the house?
    Is this purchase as a part of a will?


  • #10
    Grainne1986
    Registered Users, Registered Users 2 Posts: 10 ✭Grainne1986


    scheister wrote: »
    Who currently owns the house?
    Is this purchase as a part of a will?

    Myself and my siblings own 1/6 each. I am buying them all out. Paying 200k for the house which is valued at 300k. My parents died in 2002 and everyone has moved out so I am buying it now


  • #11
    scheister
    Registered Users, Registered Users 2 Posts: 1,310 ✭✭✭scheister


    Grainne1986 wrote: »
    Myself and my siblings own 1/6 each. I am buying them all out. Paying 200k for the house which is valued at 300k. My parents died in 2002 and everyone has moved out so I am buying it now

    thats a slightly different above was assuming coming from your parents.

    What you need to look at is what the house was valued at when you and your sibling took over the house against the 300k for CGT.

    Then the 200k v 300k for CAT purposes

    You may be able to use same event credit to reduce the CAT payable against the CGT your siblings paid.


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  • #12
    Grainne1986
    Registered Users, Registered Users 2 Posts: 10 ✭Grainne1986


    scheister wrote: »
    thats a slightly different above was assuming coming from your parents.

    What you need to look at is what the house was valued at when you and your sibling took over the house against the 300k for CGT.

    Then the 200k v 300k for CAT purposes

    You may be able to use same event credit to reduce the CAT payable against the CGT your siblings paid.

    Yes that's on the lines of advice I was given today. I do not really understand taxes so trying to get my head around it. As far as I know they will be paying approx 7k CGT between them because they moved out at different stages. I think ours will be approx 6500 between us. So that should fully cover us? What would happen if they only had to pay 6k and there was a difference, Do we just pay the difference?


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