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Tax Issues - buying out sibling

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  • 16-02-2023 7:20pm
    #1
    paulacul
    Registered Users Posts: 13 ✭


    Hi,

    Looking for advice please.

    I wish to buy a sibling out from his share of our nherited family home.

    If I buy him out for €100k, what are the tax implications for each of us ?

    I do not have a clue on these matters at all.

    Please advise.

    Post edited by paulacul on
    Tagged:


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    #2
    SureYWouldntYa
    Registered Users Posts: 7,724 ✭✭✭SureYWouldntYa


    The only issue would be if your siblings portion of the house was worth more than €100k, the portion above €100k would be deemed a gift from them to you and there may then be a tax liability

    e.g. Its 50/50 between the two of you, and the house is worth €400k. Their portion is worth €200k, therefore if you were to only pay you €100k then there would be a gift of €100k. You can receive gifts of up to €32.5k from siblings and other people deemed category b, and there is an annual exemption of €3k, therefore the taxable amount would be €64.5k, CAT rate is 33% so the tax liability would be circa €21k

    If their portion of the house is only worth €100k then there will be no issue

    The tax issue for your sibling would be if you were to buy him out for more than the house was valued when you inherited it. CGT would then apply on €100k less their portion of the value when you inherited/gifted the house.

    e.g. If their portion was worth €50k on inheritence and you pay €100k now, then CGT would apply to €50k less the €1,270 annual exemption, the CGT charge would be circa €16k



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    #3
    paulacul
    Registered Users Posts: 13 ✭paulacul


    Thanks so much for your comment.



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