CGT on Sale of Land

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Bedlam

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Am I correct in assuming that if I sell a valuable piece of land that I would pay CGT on the proceeds and if I then in turn decided to pass on the proceeds to my children that they in turn would also end up paying CGT/GIFT Tax?.

And if this is the case is there any way of reducing the amount to be paid.

Any comments / suggestions appreciated


Bedlam
 
You may or may not pay CGT. It depends on the circumstances, when you bought it, what it is sold for, and your own personal circumstances. There are various reliefs which may or may not apply.

Passing on the proceeds to your children might trigger a charge for gift tax for them, again depending on the amount and any prior gifts/inheritances.

The way to reduce the amount to be paid is to obtain professional tax advice before doing anything.
 
If the same event results in a charge to CGT and CAT (gift/inheritance tax), then the CGT can be set against the CAT.

This means that if you gift the land to someone and you have to pay CGT and they have to pay CAT, then you reduce the CAT bill by the CGT paid. If you claim this relief, the person getting the property will have to keep it for two years.

If you are selling the land directly and passing the proceeds to your children, bear in mind that children can get gifts or inheritances of up to almost €500,000 from their parents before they have to pay CAT.
 
Nige

Just to clarify, it would be my intention to sell the land (CGT) and to pass the proceeds to my children (CGT).

You mention gifting the land to them this is different to the above and confuses me in that you say that if I gift them the land I would have to pay CGT. why.. when I have n't received any monetary gain?

Bedlam
 
"if I gift them the land I would have to pay CGT. why.. when I have n't received any monetary gain?"

Because you are disposing of a valuable asset - it has a value - probably more than it had when you acquired it and a disposal is what triggers the liability - not whether you receive any monetary gain.

mf
 
If you dispose of any property for less than market value (such as gifting it to your children) you are deemed to have sold it at market value for tax purposes and the tax calculated accordingly.

The problem with this sort of scenario is that you are liable for the CGT but don't have any proceeds.

Don't forget, if you do dispose of the property between now and 30 September, the CGT is due on 31 October. The tax on gains made between October and the end of the year is payable by the following 31 January.
 
Vanilla / Nige

Thanks to both of you for the information, last question onthis topic if the CAT Allowances of the children have been used already can I assume that my original post is correct

Thanks Again

Bedlam
 
If your children's CAT allowances have been used, they can still get up to €3,000 per annum from any individual. After that, there is an annual exemption of €1,270 and then, the balance is taxable at 20%.
 
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