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.

The_Fitz

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

Rang them and the guy was helpful enough and asked me to email the details. Will let ye's know the response.

monseiur

Perhaps I'm missing something here - but as the car is just up the road from you in the North why not make an appointment with your nearest NCT depot and turn up with said car and all required documents. This will clear up any ambiguities once and for all. No need to pay anything on the day if you're not happy, just return car across the border out of EU

User1998

https://www.boards.ie/discussion/comment/121755175#Comment_121755175

Doesn’t really work like that. You need a SAD document for the VRT appointment, which is basically a VAT/Customs receipt.

They’ll basically just be turned away without it and will be none the wiser.

The_Fitz

Revenue came back to my second query on ROS portal and said in my scenario there are no VAT obligations. Good news (believe it when I see it)

Going to transfer my father 10k and have us both sign a sales receipt this weekend and drive it down the road. VRT appointment is Tuesday.

Documents:

Proof of car being in NI:

• V5C
• Father's insurance docs
• Log book showing service history in the north

Identification docs:

• Passport / Driving licence
• PPS Card
• Two printed out statements (bank and utility) showing address

Other docs:

• VRTVPD2 form printed and filled out
• Invoice from sale of receipt

Am I missing anything here?

The_Fitz

Just back from the VRT appointment.

Wouldn't let me VRT it. She said all GB initially registered cars brought into NI post Brexit need to have VAT paid on it. Which is at odds with what Revenue told me via the online portal.

I guess I go back to Revenue but not looking good on being VAT exempt.

d mc

Hey,

It's not totally clear online but I'm looking at a car in NI - which has GB plates, but has been in NI since 2018. And the MOT check online has NI for every year since then.

Does anyone know if this is adequate evidence to prove that the car has been registered in NI since before Brexit?

Thanks in advance,

David

Esel

https://www.boards.ie/discussion/comment/121948051#Comment_121948051

Yes. Just be sure to get the V5C.

d mc

https://www.boards.ie/discussion/comment/121948555#Comment_121948555

Am I right in saying that the V5C only holds records for the current owner?

The car did change habds in 2022, so do I need anything to prove ownership prior to that date?

Esel

Current keeper (owner) only afaik. I presume 'your' V5C shows current keeper as being in NI? You have to get *all* the V5C to allow you to register. Seller simply has to inform the DVLA the three car has been exported.

Bring original MOT reports and any other hardcopy proof you can get from the seller. The MOT reports from NI would be solid evidence.

User1998

https://www.boards.ie/discussion/comment/121948607#Comment_121948607

The N.I MOT from 2018/2019 will suffice

https://www.boards.ie/discussion/comment/121948626#Comment_121948626

You only need the first page of the V5. Seller can take the second page and fill out the export section if they so wish.

Charles Babbage

https://www.boards.ie/discussion/comment/121791454#Comment_121791454

Reading this page there is a change in rules at the end of April which facilitates your import.

https://www.revenue.ie/en/vrt/registration-of-imported-used-vehicles/registering-vehicles-from-ni.aspx

Esel

https://www.boards.ie/discussion/comment/121948957#Comment_121948957

Edited, thanks

Esel

https://www.boards.ie/discussion/comment/121951673#Comment_121951673

Interesting upcoming changes to treatment of cars based on date of importaion to NI. Snippet from your Revenue link below.

[Revenue Quote]

Vehicles bought from NI dealers which had not previously been in use in NI (for example, vehicles that had been in use in Great Britain (GB) prior to being purchased by an NI dealer) will require proof of Customs Declaration.

Vehicles that were moved to NI prior to 1 May 2023 will also be subject to additional VAT requirements if imported into the State. These additional requirements must be completed prior to presenting the vehicle for registration.

Vehicles purchased after 30 April 2024 can be registered in the State without being subject to these additional requirements. These vehicles will still require proof of Customs Declaration or proof that the vehicle has been in private ownership in NI for a reasonable period of time.

Proof of the vehicle’s status in NI prior to purchase will be required, for example:

• a copy of the V5C showing the last registered keeper in NI and a date of registration to that keeper
• Ministry of Transport (MOT) test history in NI
• proof of Customs Declaration which clearly identifies both the specific vehicle and the date of import
• or
• a ferry ticket showing the date of arrival in NI which clearly identifies the specific vehicle.
• [/Revenue Quote]

damemcd

Back to the reasonable length of time question…

The_Fitz

Meant to update this folks.

After getting sent away from the NCT centre I put in a complaint to revenue and plead my case.

They agreed and no extra tax on top of VRT was due.

Anyone know what happened post April 30th with the second hand margin scheme due to end?

kdevitt

https://www.boards.ie/discussion/comment/121952266#Comment_121952266

3 months according to someone who spoke to revenue recently!

User1998

3 months seems quite short. You could change the ownership to an address in NI, do an MOT up there and maybe pay for road tax and before you know it you’d be able to import the car VAT free

Charles Babbage

https://www.boards.ie/discussion/comment/122104665#Comment_122104665

There might be a market for secure parking somewhere in NI….

kdevitt

https://www.boards.ie/discussion/comment/122104665#Comment_122104665

Yeah its shorter than I expected. They'll probably want evidence that the car was insured and taxed etc, but it'll definitely be something that people will use to their advantage I'd imagine. Just need a few guinea pigs to test the waters first.