Gift tax on transfers between siblings

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Maread

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Hi
(Please move if this belongs in the law forum)

My 3 siblings and I are registered as tenants in common of our parents' house and farm. (They died intestate). We now wish to divide up the land into 4 portions, one of which will include the house which we have all agreed will go to one of my brothers. This brother's proposed portion is worth approx 60k more than the others, which are roughly equal in value.

We know that my brother will have to pay Gift Tax on this excess and that the exemption limit for Gift Tax is 47k between siblings.

My question is - is he entitled to 3 x 47k as an exemption limit as there are 3 of us giving the gift? (Hence no Gift tax liability).
If not, if he paid us the difference ie 60k minus 47k = 13k between us, would this eliminate his tax liability?
We are all happy for him to have a larger share but want to minimise any tax liability.
Thanks in advance for any advice.
 
The 47k exemption is a total exemption, not one per sibling (though the first 3k of value from each sibling is ignored in a gift situation).

CAT (gift tax) is based on the value of the property being gifted less the amount paid by the person, so, if your brother pays you all enough to ensure his total gift is less than 56k (the 47k plus 3k by 3), no tax will be payable.

Alternatively, if your brother is living in the house (and has been for the last few years) he may be able to take this gift tax free. Alternatively, you might have him move in now (if he does intend on living there) and then delay the separation of the estate until he qualifies for the exemption.
 
I've re-activated this thread because my brother has been to see an accountant who has given him advice which conflicts with Nige's.

Basically the accountant advised him that he is entitled to receive up to the threshold amount from EACH sibling tax free ie 52k from each sibling which would mean he would have no gift tax liability. This sounds too good to be true! Would be obliged if anyone could clarify.
 
Maread - I was following this thread when it first appeared. I do think the easiest way for clarification is to contact the Revenue directly as CAT is one of the easiest Taxes to calculate (once you know the rules).
 
Maread said:
I've re-activated this thread because my brother has been to see an accountant who has given him advice which conflicts with Nige's.

Basically the accountant advised him that he is entitled to receive up to the threshold amount from EACH sibling tax free ie 52k from each sibling which would mean he would have no gift tax liability. This sounds too good to be true! Would be obliged if anyone could clarify.
Click to expand...

If it sounds too good to be true.... you know the rest.

Insofar as concerns group thresholds, the group B threshold which covers gifts/inheritances from siblings among other relationships, is the total from ALL persons in that group. The accountant he spoke with is incorrect or has been misunderstood. The [broken link removed]has more information. The relevant tax code reference is the CATCA Para1 Sch2 & CATCA Para9 Sch2. If in any doubt, seek professional tax advice.
 
Maread said:
the accountant advised him that he is entitled to receive up to the threshold amount from EACH sibling tax free ie 52k from each sibling which would mean he would have no gift tax liability.
Click to expand...

You're right, too good to be true.

Maybe get a new accountant :)
 
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