CGT on house occupied by widowed mother

A

Arnoldspence

Registered User
Messages
7
My brother in law purchased a house when his father died 12 years ago his mother has been living in that house rent free since then utilities are in his name and has no mortgage
He's living with his wife and 4 kids in a 4 bed semi for 15 years in his wife's name who's paying the mortgage... He does not contribute to the mortgage on the family home.
My question is when the day comes when he sells the house where his mother is in is he liable for CGT i say yes he's saying not a chance.. Many a conversation we have had over the years.. So?
 
As @T McGibney pointed out above, PPR relief could be available on a property for a dependent relative if section 604(11) TCA applies:

A “dependent relative” is a relative of the individual or of the individual’s spouse or civil partner who is incapacitated by old age or infirmity from maintaining himself or herself, or the widowed father or widowed mother of the individual or of the individual’s spouse whether or not so incapacitated.

Relief is available in respect of a gain accruing to an individual on the disposal of a house or part of a house which during the individual’s period of ownership has been the sole residence of a dependent relative. For the relief to apply, the house must have been provided gratuitously for the dependent relative (that is, rent-free and without any other consideration). Accordingly, any period during which the relative paid a rent to the individual, or occupied the house in consideration of performing services for the individual, does not count as a qualifying period of residence.

The relief to be given, on a claim being made by the individual, is such relief as would be given in respect of the house and grounds if the house or the relevant part of it had been the individual’s only or main residence during the period of residence by the dependent relative. This relief does not affect the relief available to the individual in respect of his/her own main residence and is additional to any relief the individual could claim in respect of the house in question in respect of any period during which the individual lived in the house (as his/her only or main residence) before its occupation by the dependent relative.

There is no income limitation for determining whether or not the relative is a dependent relative for the purposes of the relief.

No 39 of 1997, Section 604, Revenue Note for Guidance

No 39 of 1997, Section 604, Revenue Note for Guidance
www.charteredaccountants.ie
 
T McGibney said:
Is his mother living alone?

It so, he may well be entitled to PPR exemption on foot of her occupation of the property since she became a widow. On balance I think he qualifies but I haven't checked the criteria for some time.

Check the Tax and Duty Manual on PPR relief.
Click to expand...
Excellent spot.
 
You must log in or register to reply here.
Back
Top