# Gifting Property To A Relative.  The Pros and Cons.



## Ireland.1 (19 Jun 2013)

My in-laws are looking to gift a property to our adult son.  The property is valued at 100k.  

We believe a valuation of 100k is grossly exaggerated considering the location of the property.       

My questions are, what gift/inheritance tax would my son be subject too, if he were to accept his grandparents offer?  Who revalues the property? 

Very much appreciated.


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## Brendan Burgess (19 Jun 2013)

> My in-laws are looking to gift a property to our adult son.


This reminds me of "that man's father is my father's son..." 

What is the relationship, if any,  of the person giving the gift to the person receiving the gift?  From your description, it appears that there is no blood relation.

Check out this post for the categories

http://www.askaboutmoney.com/showthread.php?t=131529


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## fobs (19 Jun 2013)

To me it looks like a grandparent gifting to their grandson?


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## Brendan Burgess (19 Jun 2013)

That is probably it.

But it could be the poster's brother in law who would be the recipient's uncle? 

Or the brother-in-law's wife who would not be related? 

It's better to specify the relationship of the giver to the receiver rather than their relationship to the poster. 


Brendan


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## Northie (19 Jun 2013)

Hi Brendan,

Did the OP not clarify that with his questions?



> My questions are, what gift/inheritance tax would my son be subject too, if he were to accept *his grandparents offer*? Who revalues the property?


 
Ireland1: His grandparents may also be hit with CGT as they are seen to be disposing of an asset even if not receiving money for it.

Thresholds for CAT (ie gift/inheritance tax) can be found here http://www.revenue.ie/en/tax/cat/thresholds.html


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## Brendan Burgess (19 Jun 2013)

Hi Northie

I missed that. Thanks for clarifying.


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## mf1 (19 Jun 2013)

Ireland.1 said:


> My in-laws are looking to gift a property to our adult son.  The property is valued at 100k.
> 
> We believe a valuation of 100k is grossly exaggerated considering the location of the property.
> 
> ...




I thought you were'nt supposed to look a gift horse in the mouth! Never mind quibbling over the value! 

Nobody is obliged  to accept a generous (or even a miserable) gift from their grandparents. He can refuse it. 

But if he does accept the gift, he can haggle with them as to how much it is worth so he pays less stamp duty and Capital Acquisitions Tax and they pay less Capital Gains Tax. In any event, they should agree on a value that is mutually acceptable to them both supported by an Estate Agents valuation if needs be. 

mf


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## Joe_90 (19 Jun 2013)

With the proviso that its the "market value" not an agreed value as they are connected parties.


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## Ireland.1 (19 Jun 2013)

Yes, it's his grandparents that are looking to gift the property to him.  My son is not financially comfortable and we are concerned that the inheriting of this property will add to his current woes.  

We have asked his grandparents to try and sell the property and enjoy the rest of their lives but they want him to be the recipient of it. 

His grandparents have had a "market valuation" and they have been told the value is 100k.


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## suzie (19 Jun 2013)

Can they not will it to your son, and hopefully during that "long" period your son's finances will have improved?

S.


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## AlbacoreA (19 Jun 2013)

Would selling the property and gifting him money be more helpful?


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## putsch (19 Jun 2013)

CAT is payable @ 33% of the amount by which the gift exceeds the threshold for grandparents to grandchild which is €30,150.

This link has most of the details http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

It is a very difficult situation for you if you think the gift is not in the best interests of your son. You don't say how old he is. But at any age he could have a deep resentment if it didn't go ahead over your views however reasonable they are.


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## T McGibney (19 Jun 2013)

This scenario is crying out for proper professional advice. Depending on the circumstances, there is bound to be a strategy to organise the transfer properly without a crippling tax liability.


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## Dr.Debt (19 Jun 2013)

I agree with T Mc Gibney that sometimes it pays to get proper financial advice and this is probably such a case.

In general I would say the following.

Direct  gifting of the property from grandparents to grandson will possibly  give rise to Capital Gains Tax for Grandparents and CAT tax for grandson  and stamp duty. There may be some set off allowed between the CGT and  CAT on the same transaction but that's another story.

The most  tax efficient way for the grandparents to get the property into the  hands of the grandson would be by bequeathing the property to their own  son in their will(s) and then for their son to gift the property to his  own son. By doing it this way they will most likely avoid CGT tax and  CAT tax although a small amount of stamp duty (1%) may still be payable  in the hands of the grandson.

Its best to consult a professional who  can establish what level of gain arises here when the grandparents  dispose of the property. My gut feeling is that they may save the bones of 20,000 by handing it down indirectly , on death, as opposed to gifting it directly now


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