Dwelling House Exemption Clarification?

M

McM2015

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I am looking for some information about the CAT 10 exemption. Can this still apply if the recipient has previously owned a property, and has already met their gift tax threshold?

Our situation is like this: many years ago, my parents gave gave me a gift of their second property, which used up my tax-free inheritance/gift allowance. I lived there for over ten years, but will now be moving into my mother's home to live with her, and will be renting out the home I own.

Assuming I sell my own house at some point in the next four years, will she be able to gift me the property we will be living in tax free? I have no other property besides the one I was gifted, and have no intention of ever selling the house she lives in, which I expect to remain my main residence until I myself die.

I have read the information on the Revenue's website (revenue.ie/en/tax/cat/leaflets/cat10.html), but I am still unsure if it applies to our situation as we were told previously that we would not qualify for this exemption if I had ever owned a property at any time.

Any advice or further information would be appreciated, especially from anyone who has been in a similar situation.
 
Hi there.

What you have been told is incorrect.

The "don't own another dwelling" test applies only at the time you receive the property from your mother. You could have owned 100 properties up to that (right until the day before). You just can't have another dwelling at the time of the gift/inheritance.

Regarding your tax free threshold, if the relief applies, it doesn't affect your threshold...it is a "CAT nothing" (albeit a return is required).
 
Hi Gordon,

that's a bit of good news, so thank you for that. From reading the information on the Revenue's page, it implies that I must hold the asset for six years after the date of gifting, which should be no problem as I intend to live there forever.

However, I am unsure if there is there a prohibition on owning additional property during this time? After I sell my current property to avail of this exemption, will I be able to invest that money in property during that six years, or must I wait until that period is finished?

Thanks for your help so far.
 
The ownership test only applies to the point in time when you receive the property. During the subsequent six year period, you could acquire any number of residential investment properties. You could also trade up (not relevant for you).
 
Gordon Gekko said:
The ownership test only applies to the point in time when you receive the property. During the subsequent six year period, you could acquire any number of residential investment properties. You could also trade up (not relevant for you).
Click to expand...

That's great news all together. Thanks very much for your advice and information, it's given us good peace of mind. Much appreciated.
 
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