Gift of site - joint or single names

[consol]

We (my wife and me) are being gifted a 1 acre site by my father to build a house.

If the site is transferred into both our names is my wife liable for CGT? We've been married 4 years. Someone in my bank told me we wouldn't be liable cos we're married 4 years?

Thanks for any advice.....

 

[Graham_07]

CGT only applies on disposals not acquisitions. I think you mean CAT (Capital Acquisitions Tax )

Ask your bank contact to confirm in writing that she is not liable and the reasons why. ( I suspect you may find it difficult to get such from them ).

You wife is a stranger in tax law to your father. She is therefore only entitled to the Group 3 threshold of €26,060. Any gift to her from him in excess of that is liable to CAT. ( assuming she has not already used up her threshold from previous gifts/inheritances from other parties ). The length of time you are married does not change her tax relationship to your father.

There was another thread similar to this recently on AAM check it out.
http://www.askaboutmoney.com/showthread.php?t=88628&highlight=site+girlfriend+father+gift

Additionally, your father, to avoid (legally) CGT on the site disposal would want it to meet the criteria of "Disposal of site to Child" Section 603A TCA 1997.


In any matter involving land transfers, I would recommend that you take appropriate professional advice.

 

[Mark_Mc]

Hi,

If your wife receives a joint interest in the property from your father she will be liable to stamp duty. If she took half from you after you took it all she would not pay stamp duty.

There is an exemption from CGT for gifting a site to a child for the purposes of them building their own home on it provided it meets certain conditions as to size and value and relationship.

There would also be a disposal for tax purposes by your father and he may or may not (depending on the figures and beneficiary) have a tax liability even though he has not received cash. A bank contact will not provide this unless qualified in tax as there are insurance issues for him/her. You should contact a registered tax advisor.

If you have any more questions just contact me through my homepage.

Regards,

Mark

We (my wife and me) are being gifted a 1 acre site by my father to build a house.

If the site is transferred into both our names is my wife liable for CGT? We've been married 4 years. Someone in my bank told me we wouldn't be liable cos we're married 4 years?

Thanks for any advice.....

 

[Graham_07]

There is an exemption from CAT for taking a site for the purposes of building your own home on it provided it meets certain conditions as to size and value.

Hi Mark, I know about the CGT reliefs for the disponer avoiding CGT provided S.603A conditions are met? What CAT advantages are there for the recipient? Thanks.

 

[Mark_Mc]

603a only applies to dispoals to children.

There are exemptions from CAT for transfers between spouses but may not be as black and white. There are always anti-avoidance provisions to consider, i.e. whether there are any.

Hi Mark, I know about the CGT reliefs for the disponer avoiding CGT provided S.603A conditions are met? What CAT advantages are there for the recipient? Thanks.

 

[InfoSeeker]

Sounds like gift splitting to me if you are thinking along the lines of father gifting site to child in compliance with S603A and then child gifting part of site to spouse?

 

[Mark_Mc]

Don't judge a book by it's cover. As I said, there's anti-avoidance to consider.

Gift splitting is a phrase generally used by a tax professional!!

Sounds like gift splitting to me if you are thinking along the lines of father gifting site to child in compliance with S603A and then child gifting part of site to spouse?

 

[mf1]

Isn't the real question here:

Can A take the site from his father, hopefully neither paying any tax and then can A gift half of the property to his wife? With no tax implication?

This is a real old chestnut and one that I don't have the answer to. I know that A can buy the site from his father and only pay half stamp duty and then transfer over to joint names with no problem. But is CAT not different insofar as that transfer would be seen as a transfer of half by the father to the wife?

mf

 

[Graham_07]

Gift splitting is a phrase generally used by a tax professional!!

You will find ( among other contributors) professionals from many disciplines contributing to AAM. Usage therefore of what might be seen as profession specific terminology would not be unusual here.

 

[Mark_Mc]

Yes, that's the real question. Does anyone have the answer?

Isn't the real question here:

Can A take the site from his father, hopefully neither paying any tax and then can A gift half of the property to his wife? With no tax implication?

This is a real old chestnut and one that I don't have the answer to. I know that A can buy the site from his father and only pay half stamp duty and then transfer over to joint names with no problem. But is CAT not different insofar as that transfer would be seen as a transfer of half by the father to the wife?

mf

 

[legalhawk]

my advice is no it can't be done, take site from parent but do not transfer into joint names of spouses until 3 years has past from date of initial gift , other wise your spouse is open to gift tax from original grantor, class 3 threshold! if there's a legit way around it than i'm all ears! Mark_Mc if your "professional advisor" advises it! they do so also out of a secondary liability to the Revenue Comm! anti avoidance & evasion can be a fine line!

 

[Mark_Mc]

Hi legalhawk,

Would there be any CGT if A were to transfer joint interest to spouse inside the 3 year period you mention below? You're preaching to the converted with you say evasion and avoidance is a fine line.

Regards,

Mark

my advice is no it can't be done, take site from parent but do not transfer into joint names of spouses until 3 years has past from date of initial gift , other wise your spouse is open to gift tax from original grantor, class 3 threshold! if there's a legit way around it than i'm all ears! Mark_Mc if your "professional advisor" advises it! they do so also out of a secondary liability to the Revenue Comm! anti avoidance & evasion can be a fine line!

 

[legalhawk]

there is no CGT as between spouses! if there is a CGT implication it might be for the original disponer, a notional gain if the son transferred into the name of his spouse within the 3 year period but of that i'm not sure, it's more CAT we're talking about being at issue!