Capital GAins tax selling half of house

J

Jimbob2

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If I buy half my house from my mother I pay 50% of the normal stamp duty.

She inherited half the house from her mother 3.5 years ago. She doesn't live in it. Let's say the house was valued when she inherited half the house at €500,000.

If I buy half of the house form her now for €250,000 despite the fact that it's worth more, she won't have to pay CGT becasue she inherited half a house worth €250,000 3.5 years ago and is selling it to me for €250,000. Therefore she has made no gain on it. Is that correct?

I'm aware that the stamp duty is on the transfer value and not what ipay her.
 
Is that correct?

No. Its not the price you decide, its the actual market value. How much is half the house worth? If its more than 250K then its the difference between that and the value at inheritance that will form the basis of the CGT calculation.



mf
 
Jimbob2 said:
If I buy half my house from my mother I pay 50% of the normal stamp duty.

She inherited half the house from her mother 3.5 years ago. She doesn't live in it. Let's say the house was valued when she inherited half the house at €500,000.

If I buy half of the house form her now for €250,000 despite the fact that it's worth more, she won't have to pay CGT becasue she inherited half a house worth €250,000 3.5 years ago and is selling it to me for €250,000. Therefore she has made no gain on it. Is that correct?

I'm aware that the stamp duty is on the transfer value and not what ipay her.
Click to expand...

Provided it is a 50/50 division of value... and based on it not being her principle residence, the CGT liability would be

Market Value Now for half the house: say 500k
Market Value when acquired for half the house, multiplied by indexation factor (based on inflation): say 250*1.2 = 300k
Gain = 200k
Taxed at 20% = 40k
Less Yearly Allowance of 1270.
So you'd be liable for 38,730euro
 
Market Value when acquired for half the house, multiplied by indexation factor (based on inflation): say 250*1.2 = 300k
Click to expand...

oops - the indexation factor is defined by Revenue - for a house inherited in 2002 it would be 1.049 and if in 2003 or later zilch! ie 1
 
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