Can you avoid CGT buy buying for €1?

We have been gifted a house by my wife's parents and because of this there is CGT due on the gain in value on the house since they bought it (even though they aren't receiving this gain!!) so was just wondering if we were to purchase the house off them instead where they did not receive a gain would this be a way of getting around this tax? Obviously we want to do things properly but I can't help but feel this CGT is very unfair in this scenario. We won't be selling this house as it will be our PPR so we don't mind what the value of purchase to us would be once it is less than they paid for it so that there is no gain for them.

I'm sure that someone will clarify this better than I but I believe that the CGT is calculated on the market value of the house, not on a nominal €1....

Correct. There may also be Gift/CAT tax implications although any CAT tax due could be offset by the CGT (or is it the other way around?)

Other way around. CGT will be offset by CAT, but you'll be caught for tax either way. The tax system is never that easy to fool.

Trent, you have it wrong, you set the CGT against the CAT (provided you keep the asset for 2 years).

can you not 'buy' it for the same amount they originally bought it for. that way they have no gain to pay taxes on. who is going to dispute the market value if you say that it fell into a bad state of repair and you were doing them a favour by taking off their hands. can't see any revenue chap on a bicycle actually making a visit to the house. might help if you did a bit of maintainance and produced a few invoices.

cuchulainn said:

can you not 'buy' it for the same amount they originally bought it for. that way they have no gain to pay taxes on. who is going to dispute the market value if you say that it fell into a bad state of repair and you were doing them a favour by taking off their hands. can't see any revenue chap on a bicycle actually making a visit to the house. might help if you did a bit of maintainance and produced a few invoices.

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This is called tax evasion. It's a criminal offence.

CGT is a self-assessment tax. You can put whatever you like down on the return, but if it doesn't stand up to scrutiny you are potentially setting yourself up for prosecution and fines, interest & penalties which could be multiples of the original tax liability.

cuchulainn said:

can't see any revenue chap on a bicycle actually making a visit to the house.

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Me neither. Just an audit official who drives his own car and claims handsome civil service expenses for doing so, financed by the interest & penalty charges they impose on audit settlements

cuchulainn said:

who is going to dispute the market value if you say that it fell into a bad state of repair and you were doing them a favour by taking off their hands.

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Revenue will query the market value used for SD/CGT purposes if they suspect that it is undervalued.

Using an artificially deflated figure for the purposes of SD/CGT calculations is tax evasion.

cuchulainn said:

can you not 'buy' it for the same amount they originally bought it for. that way they have no gain to pay taxes on. who is going to dispute the market value if you say that it fell into a bad state of repair and you were doing them a favour by taking off their hands. can't see any revenue chap on a bicycle actually making a visit to the house. might help if you did a bit of maintainance and produced a few invoices.

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In a word no! The Revenue man may not be on a bicycle either .
Whenever there are related parties to a Deed the Revenue insist on an independent market valuation from an auctioneers etc.. in writing. These days very few auctioneers are prepared to put their head on the chopping block(ie produce an unrealistic valuation) for anyone. If the REvenue feel there an undervaluation they can value the property themselves and impose very nasty surcharges. Bear in mind that as nearly every property transaction goes through the Revenue they have all the statistics to hand so its not that easy to hoodwink them these days.Nor is it a risk worth taking particularly as the Revenue have all the time in the world to look at these.