CGT-gifted site over 254,000 limit, any experience?

[chico_d]

Hello,

I am having trouble trying to get information on the transfer of a site from parent to child over the 254,000 threshold. The site is a garden of a PPR that has been occupied for 30+ years by the family, my boyfriends father is gifting this site, but we are concerned that the site will be over the 254,000 threshold as it has full p.p. and is in an expensive property location. It is under one acre. I am having trouble trying to get information on this issue, and was wondering if anyone has had any experience of this before.

If the site is over the threshold do you pay CGT on the whole amount or the amount over the threshold? Or is it exempt as it is a PPR of under one acre transfer? This is a very grey area and i cannot find any information on this situation. I have consulted my solicitor, who has not come across this issue before. I have also emailed the revenue a number of times but seem to get reffered from department to department, without any conclusive answer. If anyone knows who to contact in the revenue to discuss this that would also be helpful!

Thanks!

 

[ubiquitous]

Re: CGT-gited site over 254,000 limit, any experience?

You really need to get specific tax advice on this issue from an accountant or tax consultant. The potential tax liability is simply too large (and the risk of potential tax under/overpayment too high) for you to depend on unverified guidance you might receive from Revenue.

 

[Nige]

Re: CGT-gited site over 254,000 limit, any experience?

There are a couple of issues to deal with here.

Firstly, it is possible that, if the total area around the house (from which the site is being gifted) is less than one acre, then the parents may not have any liability to CGT anyway.

If a liability to CGT does arise, then the relief from it ONLY applies if the site value is less than €254,000. If it is one euro over this, the whole lot falls to be taxed. If the relief can be claimed, the tax avoided will be reclaimed from the child if they sell the propert with three years.

Regardless of the CGT issue, stamp duty is payable on the transfer of land. Again, there is a relief where the property being transferred is to a child for a site, provided it is worth less than €254,000. If it is worth more than this, it is fully chargeable to stamp duty (though consanguity relief halves the rate applicable).

 

[ubiquitous]

Re: CGT-gited site over 254,000 limit, any experience?

Firstly, it is possible that, if the total area around the house (from which the site is being gifted) is less than one acre, then the parents may not have any liability to CGT anyway.

...only if this area has no development value, which is clearly not the case in this example.