Capital Gains Tax on a partial land sale

wicklowdub

Hi

Wondering if anyone can help with this query.

We are looking a purchasing a house (this would be our primary private residence)which will be part funded by a loan from a family member. if we were to subsequently sell a part of the site (to build a house on) to the family member for the same value of the loan are we likely to be liable for CGT?

Appreciate any feedback.

Ciaran

It's likely that you would be liable to CGT. See example 10 on pages 21 and 22 of this: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-07-03.pdf

You'd have to use the market value of the part of the site for the calculation instead of the sale price in the linked eample.

Calahonda52

wicklowdub wrote: »

Hi

Wondering if anyone can help with this query.

We are looking a purchasing a house (this would be our primary private residence)which will be part funded by a loan from a family member. if we were to subsequently sell a part of the site (to build a house on) to the family member for the same value of the loan are we likely to be liable for CGT?

Appreciate any feedback.

Is a bank is part funding this?

wicklowdub

Calahonda52 wrote: »

Is a bank is part funding this?

Yes but less than a 1/3 of the total transaction, their interest in it wouldnt be reduced by the sale of part of the land, there'd be more than enough equity left.

Calahonda52

wicklowdub wrote: »

Yes but less than a 1/3 of the total transaction, their interest in it wouldnt be reduced by the sale of part of the land, there'd be more than enough equity left.

Best split the site into two now and have two legal titles, else bank may not release its charge to allow you do it later