Gift apartment to son now ?

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banchang

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I bought apartment in October 2014 for Eur127,000 & its current value is approx Eur260,000. Metro station will be built beside it in x years time ( whenever they build the metro) & its value will increase further for sure. Currently not priced in. Was going to put son in paying rent, but was thinking of instead gifting him the property now, as if I gift later it will have much higher value & eat further into CAT threshold.

Thoughts on this appreciated & any tax liabilities due for me/son should I proceed - presume sale is crystallized at market value on transfer, & I have to pay CGT on 260k-127k ?
 
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You’ll have CGT, but the problem is if the recipient’s CAT threshold hasn’t been used up yet, there’s no credit for the CGT against the (non existent) CAT.
 
banchang said:
I bought apartment in 2011 for Eur127,000 & its current value is approx Eur260,000. Metro station will be built beside it in x years time ( whenever they build the metro) & its value will increase further for sure. Currently not priced in. Was going to put son in paying rent, but was thinking of instead gifting him the property now, as if I gift later it will have much higher value & eat further into CAT threshold.

Thoughts on this appreciated & any tax liabilities due for me/son should I proceed - presume sale is crystallized at market value on transfer, & I have to pay CGT on 260k-127k ?
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If the property happened to be bought after December 11th 2011 you would have practically no cgt liability. (doubtful I know tho). 7 year cgt rule from 2011
 
I checked again & I actually bought it in October 2014 - OP now corrected. I looked up the 7 year rule & it would appear that if I transferred to him later this year, crystallizing the sale at market value, I will have held it for 10 years & will get relief for 7/10 of the CGT liability & 3/10 of the gain (approx 40k) would be taxable, giving a tax charge of approx 13k ?
 
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I will Brendan ! Sounds from all responses that it’s a sensible thing to do, esp as I can see value growing by up to 100k once Metro up & running.
 
banchang said:
I checked again & I actually bought it in October 2014 - OP now corrected. I looked up the 7 year rule & it would appear that if I transferred to him later this year, crystallizing the sale at market value, I will have held it for 10 years & will get relief for 7/10 of the CGT liability & 3/10 of the gain (approx 40k) would be taxable, giving a tax charge of approx 13k ?
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Yes that seems correct as far as I know. Again just get professional advice before making any move but I'm fairly sure you're good .
 
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