Land Valuation for Gift Tax

[redbiro]

My wife's aunt is giving us land to build a house on - it's currently zoned as agricultural and no planning permission exisits. Assuming we get planning permission (subject to local needs planning requirements) we will build there.

What I'm curious about is what whether the land can be valued at it's current (i.e. agricultural ) value if we get the conveyancing done now, as against it's greatly increased value later if planning is granted.

It'd make a big difference (even with the 50K approx family exemption under gift tax rules) if we could value it as agricultural land rather than as a site. It'd save a tidy penny on stamp duty too for that matter.

The land would have no value as a site unless it's sold to someone who can prove local needs to get planning permission which make me think it's be okay to value it as agricultural land.

Any thoughts? Anybody been through this before?

 

[z108]

My thoughts are first and foremost be careful with your first time buyer status. Have you considered what would happen if after accepting ownership of the plot of land, the planning permission were refused ?

I think from reading another thread that a gift is not seen the same way by revenue as an inheritance regarding retention of first time buyer status. So with this in mind have you checked whether accepting the gift of land might lose you the first time buyers tax privileges . This would be an important if a refusal of planning permission forced you to subsequently buy a home elsewhere.

 

[Nige]

A site is not a residence and therefore not relevant to the FTB status for stamp duty.

The value of the gift of land from your aunt, is the value at the date of the gift. If the land, at that time, does not have planning permission, it will be valued at the agricultural value. If you do succeed in getting pp (and there are no guarantees) then it will be your efforts that will have increased the value. If you don't get it, you are stuck with a field that isn't worth much.

It would be advisable to get an independent valuation of the land at the date of the gift, in case of any queries from the Revenue.

 

[z108]

A site is not a residence and therefore not relevant to the FTB status for stamp duty.

.

Is this mentioned on revenues website ? An investment property is similarly not a residence but as far as I've picked up through this board, being gifted or purchasing one disqualifies you from FTB status.

 

[Nige]

A residence requires a structure. A site is not a house/apartment or any other type of residential property (and hence sites are treated differently to buildings for stamp duty purposes).

 

[Nige]

An investment property is similarly not a residence

Of course an investment property is a residence if it is residential property. It doesn't matter that it is not YOUR residence, but it is a residence.