Tax Exemption for Dwelling House - CAT 10 - Section 86

S

Stan Cronin

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From what I understand the core points are:

- The recipient must not, at the date of the gift/inheritance, be beneficially entitled to any other dwelling- house or to any interest in any other dwelling- house.


- The Recipient must be living in dwelling-house for 3 year prior to the date /inheritance tax free.


- The recipient must continue, except where such recipient was aged 55 years or more at the date of the gift or inheritance or has died, to occupy that dwelling- house as his/her only/main residence for a period of 6 years commencing on the date of the gift/inheritance. Where the dwelling- house is directly/indirectly replaced by other property, this condition may be satisfied where the recipient continuously occupied both properties as his/her only/main residence for a total period of 6 out of 7 years commencing on the date of the gift/inheritance. A recipient absent during any time through working abroad is considered to remain in continuous occupation of that dwelling house.


Questions

1) Could you in theory, build an additional house on land of house inherited under CAT 10 Section 86 and live in that for 6 years and not incur a tax claw back? Is that what the lines below could refer to?

“Where the dwelling- house is directly/indirectly replaced by other property, this condition may be satisfied where the recipient continuously occupied both properties as his/her only/main residence for a total period of 6 out of 7 years commencing on the date of the gift/inheritance.”


2) Furthermore is there a 1 acre limit to the dwelling you can inherit tax free under the
CAT 10? How could you work around it if dwelling was on more that one acre?
 
Replaced means sold and the proceeds used to purchase a new house which the person lives in. Building another house and not selling the first one would not be reinvesting the proceeds.

If the garden is more than 1 acre it may qualify for agricultural relief .
 
Bumping this old thread as it's very similar query I have, but I want to know if the above still stands or has been replaced by new legislation, I've received advice from a legal professional that the above does indeed still stand, but if they are wrong, it could cost me a substantial amount of money in excess of 250k+.

"The recipient must continue, except where such recipient was aged 55 years or more at the date of the gift or inheritance or has died, to occupy that dwelling- house as his/her only/main residence for a period of 6 years commencing on the date of the gift/inheritance. Where the dwelling- house is directly/indirectly replaced by other property, this condition may be satisfied where the recipient continuously occupied both properties as his/her only/main residence for a total period of 6 out of 7 years commencing on the date of the gift/inheritance. A recipient absent during any time through working abroad is considered to remain in continuous occupation of that dwelling house."
 
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