Capital Acquisitions Tax

Pixel Eater

So buying a house with the missus (we're not married). She was given several grand from her parents as a gift which she choose to use as part of the deposit. It's well below the treshold so will incur no tax.

Great except our solicitor says that as I'm not a blood relative I will be liable for tax on half of it, minus the tax free allowance amount.

Is this correct? Seems odd to me as she was bestowed the amount and personally choose to use it as a deposit. I was checking it online and doesn't seem clear that this is the case.

y0ssar1an22

Pixel Eater wrote: »

So buying a house with the missus (we're not married). She was given several grand from her parents as a gift which she choose to use as part of the deposit. It's well below the treshold so will incur no tax.

Great except our solicitor says that as I'm not a blood relative I will be liable for tax on half of it, minus the tax free allowance amount.

Is this correct? Seems odd to me as she was bestowed the amount and personally choose to use it as a deposit. I was checking it online and doesn't seem clear that this is the case.

how much was the gift?

they can each give each of you 3,000, so 12,000 in total.

they can then give her an additional 335,000 tax free as group A (provided not already used).

you can also receive 16,250 tax free as group C (as above, if you have not used your lifetime limit).

Pixel Eater

About 60k. Already got a document to say it was a gift to her from her parents; never thought it would be an issue at the time.

Are we definitely liable?

y0ssar1an22

Pixel Eater wrote: »

About 60k. Already got a document to say it was a gift to her from her parents; never thought it would be an issue at the time.

Are we definitely liable?

if thats the only gift, its absolutely not an issue and no tax is due. not sure why the solicitor is making such a deal of it TBH

thegolfer

Pixel Eater wrote: »

About 60k. Already got a document to say it was a gift to her from her parents; never thought it would be an issue at the time.

Are we definitely liable?

Specify exactly who got the money.

If your GF got money from her parents then assuming it didn't exceed the 335k then she is fine.

Has she gifted you any amount?

On purchasing the house are you both contributing equal amounts, or is there unequal amounts there?

As stated above you can receive an amount tax free 3k however would need to know the specific details.

okidoki987

I'd guess the solicitor is saying that because you are buying the property jointly.
As you are not related to her parents, as mentioned above, you're only allowed to get €3k tax free from each of them.
So in this case, my guess is, the solicitor is saying €60k/2 is 30k each as you are buying the house jointly.
You can have €6k tax free, so tax would be payable by you on €24k.

Pixel Eater

thegolfer wrote: »

Specify exactly who got the money.

If your GF got money from her parents then assuming it didn't exceed the 335k then she is fine.

Has she gifted you any amount?

On purchasing the house are you both contributing equal amounts, or is there unequal amounts there?

As stated above you can receive an amount tax free 3k however would need to know the specific details.

The whole gift was to her. Nothing to me. 60k so well below the 335k tax free cutoff. For the deposit: about equal amounts but with the gift included, her a lot more than me. Does that matter?

okidoki987 wrote: »

I'd guess the solicitor is saying that because you are buying the property jointly.
As you are not related to her parents, as mentioned above, you're only allowed to get €3k tax free from each of them.
So in this case, my guess is, the solicitor is saying €60k/2 is 30k each as you are buying the house jointly.
You can have €6k tax free, so tax would be payable by you on €24k.

Yeah I'm guessing that's the angle, as she's using the gift to purchase an asset that we'll jointly own I'm liable for tax on it. Seems bizarre to me though, surely they are both separate issues?

Ronney

Your first mistake would be taking Tax advise from a solicitor!

Could you no break it down that she owns more of the house than you relative to the extra she puts in ?

thegolfer

Simple solution.

She loans to you the relevant amounts to even up purchasing of the house, no major issues there.

When you marry she can gift to you the loan amount, no tax issues. Structure pre purchase loan and restructure post purchase gift to you, when you marry. Wife can gift to husband no tax issues.

longgonesilver

Should there be two solicitors involved?

One each.

LawBoy2018

I'm pretty sure that gifts from a parent above 3K for the deposit of a house are not exempt from CAT.

https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/cat-treatment-receipts-by-children.pdf

How much of the 60K was used on the deposit?

y0ssar1an22

LawBoy2018 wrote: »

I'm pretty sure that gifts from a parent above 3K for the deposit of a house are not exempt from CAT.

https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/cat-treatment-receipts-by-children.pdf

How much of the 60K was used on the deposit?

Gift of House Deposit
A Gift to a child of a deposit for a house in excess of the annual small gifts exemption of €3,000 is subject to CAT.

thats S4.2.

Its still irrelevant though, if you have not breached the threshold.