VRT/VAT - Father gifting car from NI

The_Fitz

Hi folks,

For the life of me I cannot work out if VAT is chargeable in my situation. VRT is roughly 7.5K.

Father has a car. 2020 reg. Important bit - car was first registered in GB. It was then purchased by a dealer in the north in December 2021 and my father bought it then. It's been registered and used in the north since December 2021.

Revenue states "A vehicle that has previously been in use in NI can be registered for Vehicle Registration Tax (VRT) in the State, without liability to additional Customs duties and import Value-Added Tax (VAT). Proof will be required that the vehicle has been in private ownership for a reasonable period of time."

Sounds good, it's previously been in use in NI, logbook states when it was moved to the North, MOT certs etc.

Also from Revenue:" Registering vehicles bought by NI dealers before 01 May 2023 and sold before 01 May 2024

Where a vehicle has been purchased in GB by an NI dealer and declared to Customs on import into NI prior to 01 May 2023, there will remain a liability to VAT on import into the State. VAT will apply at the standard rate (currently 23%) and must be discharged before the vehicle can be registered."

Which also fits.

My father wants to gift me the car (due to high VRT charge) but is it advisable to pay him something?

Esel

VRT wil be calculated based on the OMSP (Open Market Selling Price) as determined by Revenue, not on the price you paid.

The_Fitz

https://www.boards.ie/discussion/comment/121732361#Comment_121732361

Yes I know that cheers

VRT isn't the issue here.

Well it's not my issue anyway.

mickdw

That is a recent change regarding vehicle having spent reasonable time in Northern Ireland so hard to comment.

I don't know if they would be looking for 6 months or a year of use in Ni but in your case, it should be fine considering its there and in use since 2021.

I don't think the dealer bit is relevant here.

Try to contact revenue and get some clarification re length of time required in NI.

Esel

Oops

I remember reading here recently that there are changes coming soon wrt importing vehicles from NI which may work in your favour.

No link I'm afraid, but googling with 'site:boards.ie' in the search might find the thread/ post.

Best of luck.

User1998

If the car is a gift then there is no VAT or customs due. VAT and customs is paid on the purchase price of the car which in this case is zero. VRT applies as normal

The_Fitz

https://www.boards.ie/discussion/comment/121732394#Comment_121732394

Cheers, I'll ring them tomorrow!

The_Fitz

https://www.boards.ie/discussion/comment/121732396#Comment_121732396

Cheers!

The_Fitz

https://www.boards.ie/discussion/comment/121732408#Comment_121732408

How do I prove it's a gift? I imagine folk would look to abuse this.

I'll give customs a shout tomorrow.

User1998

https://www.boards.ie/discussion/comment/121732475#Comment_121732475

A sales receipt from your father, bank statements etc.

Del2005

https://www.boards.ie/discussion/comment/121732408#Comment_121732408

Any gift over €3k is subject to CAT @ 33% on the remaining value. @33.45

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/small-gift-exemption/index.aspx#:~:text=Gifts%20you%20receive%20up%20to,in%20the%20same%20calendar%20year

User1998

https://www.boards.ie/discussion/comment/121732620#Comment_121732620

Thats a completely different tax tho and has nothing to do with the import process

The_Fitz

Rang the VRT helpline twice, both times they put me through to a VAT number and it rang out.

Anyone have a number for Revenue I could call about this?

kdevitt

https://www.boards.ie/discussion/comment/121732408#Comment_121732408

My guess is that you're wrong on this - especially since theres tax implications on receiving a gift from a parent. With a zero invoice value, revenue move on to the next valuation method - which is transaction value of identical goods. In other words they'll pick a value for it. If they do accept its a gift, then the value of the car minus the small gift exemption would probably be treated for CAT. Interested to see how it ends up working out though!

kdevitt

https://www.boards.ie/discussion/comment/121733680#Comment_121733680

01 738 3676

whippet

https://www.boards.ie/discussion/comment/121732620#Comment_121732620

The lifetime gift from parent is over €300k so unless it is a brand new Ferrari I doubt he will meet that threshold

kdevitt

https://www.boards.ie/discussion/comment/121734389#Comment_121734389

Yes, but they also are entitled to 3k per year as well as the lifetime limit under the small gift exemption - so car value minus small gift exemption will be deducted from any lifetime limit remaining.

User1998

https://www.boards.ie/discussion/comment/121734318#Comment_121734318

If you receive a gift from someone overseas outside of the EU it doesn’t need import taxes paid, it gets delivered straight to your door. Same as free samples and stuff like that. I don’t see how this is any different. If someone sends you a birthday present from abroad its not evaluated and a tax bill sent to your door, it just gets processed as a gift and gets delivered.

Yes, a car is on a bigger scale, but in theory its the same principle that applies. I’m sure there are people out there being gifted €2,000 Gucci bags and stuff like that.

kdevitt

https://www.boards.ie/discussion/comment/121734863#Comment_121734863

A gift is VAT and duty free up to a value of €45, I suspect the car is worth more

The_Fitz

https://www.boards.ie/discussion/comment/121734323#Comment_121734323

Cheers, missed their opening hours, will bell them back in the morning

The_Fitz

Found this update (Nov '23) on Revenue.

Is this up for interpretation or am I just not facing facts 😀

Section 3 - Is this saying that an NI dealer purchases a car from GB before 1 May '23 and then sells directly to someone in ROI before 30 April '24 would mean said person in ROI is required to pay customs? Whereas in my situation the NI dealer did purchase from GB before 1 May '23 but then sold it to an NI resident who for just over 2 years drove it as normal in NI, then sold it to an ROI resident (I don't want to get too hung up on the gifting part of my query, as I'm sure my da would be happy enough for money for it - as would I be to pay), therefore triggering section 2 "Vehicle that has previously been in use in NI".

Section 3 screams to me a direct purchase from NI without it actually being used there - however, I am also wanting to believe that.

Gavlor

https://www.boards.ie/discussion/comment/121735104#Comment_121735104

Let us know the outcome!

kdevitt

https://www.boards.ie/discussion/comment/121735153#Comment_121735153

Think everyone is waiting to see how that plays out - the 'reasonable amount of time' language is pretty vague.

Just reading your initial post again though and I think you're in the clear - once you have evidence it was used privately in NI you'll be fine, so some MOT certs should suffice.

I used bell.ie to clear my last import - give them a buzz now and they'll set you straight.

The_Fitz

Revenue got back to me on Ros:

"If the vehicle was registered and remained in NI, VAT would not be payable."

Could take this at face value. Or they might not have read my question properly that it was first registered in GB.

kdevitt

https://www.boards.ie/discussion/comment/121735250#Comment_121735250

No, thats correct. I misread your original post in that I thought it came in from GB and wasn't registered. Once its been registered and used its fine - no VAT implication on it. VRT centre will ask for a receipt for purchase though - so I'd write up something and sign it to avoid opening a potential can of worms with the whole gift aspect.

whiterebel

https://www.boards.ie/discussion/comment/121734863#Comment_121734863

https://www.revenue.ie/en/customs/individuals/relief-gifts-low-value/rules-gifts.aspx

The_Fitz

https://www.boards.ie/discussion/comment/121735308#Comment_121735308

Unreal. I just went back to her for clarification but to be honest I'm a bit more hopeful now than I was previously.

Will get my da to send me his insurance docs car tax stuff and service docs. No MOT as too new. Guess they need to be originals?

Receipt of purchase - I probably will send my da money for it as I don't want any ambiguity with inheritance tax etc. Say car is worth £18K. Could I feasibly put a purchase price of £10K. Could this screw me further down the line?

Del2005

https://www.boards.ie/discussion/comment/121733229#Comment_121733229

If the point of the gift is to avoid paying tax when importing it it's relevant to the process.

https://www.boards.ie/discussion/comment/121735412#Comment_121735412

If you buy something to cheaply revenue can still consider it a gift. Not sure how they'd treat £8k thought.

mickdw

Forget the gift side. If in use in NI for that length, it will be in the clear bases on the latest revenue update on rules.

I'm looking for any clarification as to what they regard a reasonable time in NI.

celtic_oz

https://www.boards.ie/discussion/comment/121736544#Comment_121736544

Its absolutely ridiculous that tax information documents use vague terms like "reasonable". In my view its a blatant attempt to curtail imports by introducing ambiguity.

kdevitt

https://www.boards.ie/discussion/comment/121738106#Comment_121738106

Agree completely - and it just takes one precedent case after which the ambiguity should be gone, which in turn renders the initial ambiguity nonsensical.

Revenue normally put up examples of what falls under each case, so hopefully it'll become clearer soon. I'd guess evidence of an MOT and at least 6 months ownership in NI, but who knows. TOR stipulates 12 months ownership before the VRT liability disappears, so they might make it that long.