Taxation of Rental income

[GNMCGR]

Hi,

I transfered a property to my 3 children, but part of the terms of the transfer was that I would still receive the rental income even though the property was in their names. Is this rental income taxed as income and taxed under income tax, or is it a gift and taxed under CAT?

Thank you for your opinion.

 

[mandelbrot]

Hi,

I transfered a property to my 3 children, but part of the terms of the transfer was that I would still receive the rental income even though the property was in their names. Is this rental income taxed as income and taxed under income tax, or is it a gift and taxed under CAT?

Thank you for your opinion.

Well I doubt it can be taxed under CAT, surely it cannot a gift if they're contractually obliged to give you the money?? It sounds like Case V income to me:

S. 75 TCA 1997 —(1) Without prejudice to any other provision of the Income Tax Acts, the profits or gains arising from—

(a) any rent in respect of any premises, and

( b) any receipts in respect of any easement,

shall, subject to and in accordance with the provisions of the Income Tax Acts, be deemed for the purposes of those Acts to be annual profits or gains within Schedule D, and the person entitled to such profits or gains shall be chargeable in respect of such profits or gains under Case V of that Schedule; but such rent or such receipts shall not include any payments to which section 104 applies.

There's horseracing to be watched today, so hopefully someone else with specific knowledge in this area will enlighten us more fully!

Also, this arrangement may have had an impact on the value of the disposal for CGT purposes... was that factored in at the time I wonder...