CGT, CAT on Parent gifting a property to son (not PPR)

A

aoservices

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Hi,

Can anyone tell me if a parent gifts one of their properties to their child is there CGT or CAT liabilities.

Scenraio:
Property was bought/developed 10 years ago for about €50k.
Today it is worth €150k.
It is a rental property with a monthly income of €500.

The parent gives it to their child as a gift in 2005.

What are the tax liabilities?

1) The child pays Stamp Duty at 3%???
2) Is there CGT/CAT liability???

Tia,
 
The disposal to the son will be a disposal for CGT purposes. So the parent will have to pay normal CGT on their gain.

The son pays half the normal rate of Stamp Duty on purchases of homes from their parents. I assume it applies to all property, but I don't know.

You will be deemed to have received a gift of €150k, which will not give rise to a CAT liability if you have not received any other gifts which would bring you up to the CAT exemption limit which is around €440k.

Brendan
 
So upon gifting the property to the son the parents would be liable to CGT on the gain in the properties value since the purchase?

It was bought/built 10 years back for eu50k and is today worth eu150k with growth being eu100k They would have to pay CGT at 20% = eu20k.

Is that correct?
What can be done to minimise this value? What can be written off in costs?
How soon does it become payable?

tia
 
Just came across this post to day

CGT is payable as follows

Purchase Price €50,000 (assume Euro as above not punts)
Purchase cost i e Legal etc
Total Purchase Costs 50,000

Multiplier 1.227 if bought after 6/4/95 See [broken link removed]

After applying multiplier 61,350

Enhancement Costs
Multiplier from year enhancement incurred

Total 61,350

Selling 150,000
Less Selling Expenses I.e Legal Auctioneers etc
Total Selling Costs say 150,000

Less
Total Purchasing Costs 61350

Total Enhancement Costs

Gain 88,650

Annual Exemtion 1270

Gain for CGT purposes 87,380

CGT @ 20% = 17,476

I have used the figures in the above example but don't forget about enhancement costs after applying the multiplier etc.
 
Market value 150k, this seems low. Can you get it undervalued in order to limit CGT?
 
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